How is the poverty line determined ?

I’ve seen a couple of recent headlines about the number below or near the poverty line…

  1. Does it vary by locale?

  2. Is government assistance included in income?

  3. Assuming that its based on the cost of certain minimal needs like food, housing etc. I wonder what is in the etc.

  4. Have the calculations always been the same or have they been refined over the years?

The usual definition used in the U.S. is the Orshansky definition. The minimal amount of food that a person can live on is calculated. The minimal cost of that food is calculated. This cost is multiplied times three, since it’s assumed that at a minimal standard of living, the cost of food will be one-third of one’s total expenses:

(Never mind - question was included in OP.)

HHS actually just started tracking a new measure that’s supposed to compensate for social/gov’t changes over the last fifty years. The new measure includes gov’t benefits as income, but also takes the threshold as a larger multiple of the cost of food, as food has gotten much cheaper over the last half century while other essentials (especially housing and healthcare) have gotten more expensive.

Its for use with future legislation though. Presumably you’d need an act of Congress to link existing programs to a new definition of poverty.

Do you know the resulting average poverty line with this? (And if you can include the average with the old system, that would be good, too.)

I can’t speak for the U.S., but Statistics Canada calculates a low income cut-off. Note: they are very specific that it is NOT a “poverty line” because no one can decide what “poverty” means. Nevertheless, politicians, think tanks and the news media still persist in using it in discussions of poverty.

StatsCan sends out a survey to get household expenditure data and then the LICO is set “where families spend 20 percentage points more of their income than
the Canadian average on food, shelter and clothing”.

BigT writes:

> Do you know the resulting average poverty line with this? (And if you can
> include the average with the old system, that would be good, too.)

This chart from the Wikipedia entry gives the raw numbers and percentages according to the Orshansky definition:

I guess this is what you mean by the old system. I don’t know of any charts for the new system. Note that the only significant long-term change by the Orshansky definition for the last fifty or so years is that the percentage of Americans in poverty dropped from just over 22% in 1959 to just under 12% in 1974. Since then it’s bounced around from just under 12% to just over 15%.

Here’s the pdf the Census Bureau released describing the new measure. The new measure (SPM) is about a point higher in 2010 then the traditional measure.

the cost of one’s “basket of goods” for one month is the monthly income pverty line.

To add to this, while the average poverty level didn’t change much, that actually masks a large shift in the poverty level for different co-horts. Basically, young people and families with children have a much lower poverty level (because benefits are now counted as income, and benefits in the US are targeted at families with children) and seniors have a much higher poverty level (because older people spend a lot more on medical care, which has gotten much more expensive relative to food since the 1960’s).

Do you have a cite for that?

So you’ve never met mac_bolan?

Was my post too subtle? Let me rephrase: I call Bullshit!

Certainly not. Was mine? Let me rephrase: Duh. That poster has, shall we say, a knack for it.

i was confused. i they they were both detractors of mine so why are they arguing? :smiley:

sorry, i had to add. anyone with balls to post should already understand what i was talking about. ‘cite-brains’ tend to discard sense and reason. since poverty threshold, by wiki def, is the minimum level of income to achieve an “adequate standard of living.” your “standard of living” is in turn determined by what resources you would need at that “time and place” in history. the term “basket of goods” is more commonly used when determining cost of living and purchasing power, since the “basket” changes in value due to inflation. nevertheless, your basket, with inflation set at zero, will determine your minimum level of income.

aside from re-valuation issues caused by inflation, the fundamental diffecence in BOGs across different times and places also makes comparisons difficult. it’s hard to tell who was better off: a roman noble at the time of caesar, a london banker at the time of victoria, or a japanese tycoon in the 80s.

What I have learned (I think). In CAPS within the quote…