Basic Needs Concept:

This approach measures welfare of individuals or households on  the basis of certain basic needs such as food, clothing, housing, education and simple medical treatment. The basic needs concept of  poverty  defines  poverty  as  the deprivation of requirements,  mainly material for meeting basit human needs. The poverty measurement based  on  this approach includes access  to  such  necessities as food, shelter, schooling, health  services, potable water and sanitation facilities, employment opportunities,  and  even touches on opportunities for community participation.  Inclusion of these indicators increases the magnitude and scope of poverty estimates.

The advantage of the basic needs approach over the per capita  income approach  is that  they  measure goods  and  services directly  in  terms of  human  welfare.  For example, a rise  in housing or essential transport costs would be counted as a decline in well-being using basic needs indicators, while per capita GDP would record this as an  increase. There are problems  in  adding up  or aggregating the consequences of decline in well being as a result of increase in  transport costs or healthcare facilities. Cross-country comparisons also have to be done using this data very carefully.