. Explain whether the U.S. poverty line is an absolute or relative measure.

Name: Problem 4, Chapter 13: Principles of Microeconomics
Uploaded: 2023-08-31T03:49:47-08:00
Duration: 5 min 49 s
Channel: Akash M
Description: . Explain whether the U.S. poverty line is an absolute or relative measure.

. Explain whether the U.S. poverty line is an absolute or...

Key Concepts

Relative Measure

A relative measure of poverty defines poverty in relation to the economic status of other members in society. It typically uses gauges like a percentage of the median income, which makes the standard flexible and responsive to changes in the distribution of income within a society.

Poverty Line

The poverty line is a specific income threshold used to determine who is considered economically disadvantaged. In the U.S. context, it is traditionally calculated as an absolute measure—set based on historical estimates of basic living costs—though it does not account for variations in regional cost of living or shifts in overall economic conditions.

Absolute Measure

An absolute measure of poverty relies on a fixed threshold that represents the minimum income necessary for basic living standards, such as food, shelter, and clothing. It is not influenced by the overall wealth or median income of a society, meaning this benchmark remains independent of changes in the economic status of the general population.

Transcript

00:01 So, interference in related poverty, absolute poverty, absolute poverty refers to a condition where individuals or households lack a basic necessity required to live there.

00:28 Basic needs for survival such as food, clear water, shelter, clothing, and access to healthcare and education.

00:36 Absolute poverty is often measured using an income on threshold.

00:41 Thresholds that represent a minimum income need to afford these basic necessities.

00:49 If a person or household incuples below this threshold, they are considered to be living in absolute poverty.

00:56 So, related poverty.

01:02 Related poverty, on the other hand, is a measure of poverty that considers an individual or household income or resources in relation to the broader society context.

01:21 It focuses on how people's economic status compare to the economic status of the rest of society.

01:28 In related poverty, individuals or households are considered poor if their income or resources are significantly low compared to the average income or resources of the population.

01:41 It is a related measure that takes into account income inequality and social norms.

01:47 And next question, importance of poverty.

01:51 Importance of related poverty.

02:05 First thing is social inclusion and loyalty.

02:11 Related poverty highlights the disparities in income and resources within a society.

02:29 Even if basic needs are met, individuals or households experiencing related poverty might still face exclusion, social isolation, and reduced opportunities for participants in society's activities...

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