“Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the type of diet, participate in the activities and have the living conditions and the amenities which are customary, or at least widely encouraged or approved in the societies to which they belong.” Peter Townsend (1979), p.31

Measures of poverty can be absolute, relative, or some hybrid of the two. Absolute poverty is insufficient income to meet basic needs, like food, housing, and healthcare. Relative poverty is low income compared to a typical income within the wider society. A hybrid poverty measure would be “anchored” poverty, which looks at how the relatively poor from a prior period are doing at a later time given changes in cost of living.

Most developed countries use a relative measure of poverty, in keeping with the understanding that basic needs and acceptable living conditions are partly a matter of societal norms. The idea of relative poverty recognizes that basic needs extend beyond the merely material and include markers of status and belonging within a particular society. But "society" is an abstract concept.  Society doesn't act on the individual directly but through intermediaries: family, intimates, friends, acquaintances, neighbors, teachers, co-workers, peers, public figures, the media - to name a few.  Some of these intermediaries have a greater effect than others on our sense of status and belonging. Some matter more to our happiness, whether we're poor or rich. Which are they and how do they work their magic?

Next: Poverty, social comparison, and reference groups.

References:

Kingdon, Geeta Gandhi and Knight, John: Community, comparisons and subjective well-being in a divided society. In: Journal of Economic Behavior & Organization 64 (2007), 1, pp. 69-90. DOI: https://doi.org/10.1016/j.jebo.2007.03.004

Morelli, S.,  Smeeding, T. andThompson, J.  Post-1970 Trends in Within-Country Inequality and Poverty: Rich and Middle Income Countries. (IRP Discussion Paper No. 1419-14) Institute for Research on Poverty, University of Wisconsin-Madison. March 18, 2014.

Townsend, Peter (1979). Poverty in the United Kingdom. London: Penguin.