Funferal

Measuring poverty

There’s an article in the New York Times today looking at the US Census Bureau’s calculation of poverty rates. The article calls for an update of the figure to reflect changes in consumption patterns – which, it is envisaged would increase the number of people falling within the definition of poverty.Regular readers will know of my interest in measures of income, poverty and cost of living – a throwback to my time in eircom where I dealt with inflation figures quite a bit. What I find fascinating here, however, is that the figure is based on an absolute level of poverty. In Ireland, and I believe in many other places, the generally quoted standard is a relative measure of poverty – such as 60% of the median household income. Of course, in the case of the US we have the interesting situation that a relative measure of poverty would quite possibly fall below the absolute poverty level – I’m not sure whether this would be the case in other countries.According to one site there are three main ways to measure poverty:

Absolute poverty, takes into account the cost of a minimum package of goods, services and considers those who’s incomes are equal or below this cost, to poor. Relative poverty, takes into consideration the whole group whose income is below the determine level. Example, in some countries the poor are those whose income are below half the minimum wage. This estimate is used by societies who have eradicated absolute poverty. Social exclusion, used in Europe, considers those who have no access to services, such as employment, superior education, ownership of housing, health.