FMSC 381 Lecture 2: Measuring Poverty and Affluence notes
27 Feb 2018
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Document Summary
Defining & measuring poverty: different ways to measure poverty, each with a different set of assumptions, results, and interpretations. Absolute poverty: the amount of money required to meet basic needs (if household earns less than that amount, considered to be living in poverty, two measures: Federal poverty thresholds: for statistical purposes, issued by census bureau, established by the social security administration in 1964, initially based on family food consumption times three (now uses consumer price index) 1950"s survey data indicates families spent 1/3 of after-tax income on food: multiplied a reasonable food budget by three. Food and housing costs are different now than 50 years ago, have likely been undercounting poverty: thresholds adjusted for family size, number of children & elderly, and inflation, criticisms. Does not reflect modern expenses and resources (food times three is no longer relevant) Does not vary by geographic region and take differences in cost of living into account.
