For example, there is a concept of absolute poverty that is used in some countries to measure the economy.
A threshold is set up and the households having total earnings falling below this threshold are marked as poor.
Though, in a market, when buying a product, one gets a chance to compare the product with other similar products made by several companies and this helps in choosing one that is most suitable for his requirements.
Let us take a closer look at the two concepts, absolute and relative.
When you are looking at a relative perspective, you are taking into account other similar people or products.
So, it is more of a perspective based on comparison rather than seeing something as an individual entity.
When it comes to grading students too, absolute grading is used.
Relative poverty is a concept where people below this threshold are compared with those lying above the poverty line, to analyze the extent to which poor household’s fall below the nation’s average income households, compare living standards and devise welfare programs to end this divide.When you are looking at an absolute perspective, you are not taking into account other similar people or products.You are taking an object as it is and coming to a conclusion based on what it has to offer.The concept of relative is used in health care industry, as well.
There is a relative risk that a person has to develop a disease or ailment in future.The difference between absolute and relative stems from the choice of comparison.