2 Measuring Poverty Free Online FlashCards

What are operational definitions in poverty measurement?

Operational definitions specify what counts as well-being and how much is enough; those choices shape who is classified as poor.

What does an income measure estimate, and what is one limitation?

Income measures estimate money available over a specified period. Income may fluctuate, be underreported, or omit earnings from informal work.

Why may researchers use consumption to measure welfare?

Consumption measures estimate what a household spends on or uses. Researchers may prefer them where earnings are irregular because consumption can reflect living standards over time.

How can analysts account for differences in household size?

Per-person measures divide resources by household size; equivalence scales adjust for household size and composition. Both rely on assumptions and may miss unequal resource sharing within a household.

What is a poverty line?

A poverty line is a cutoff separating people classified as poor from those above the cutoff.

What defines an absolute poverty line?

An absolute poverty line is tied to a defined minimum standard of basic needs and may be updated to reflect price changes.

How does a relative poverty line differ from an absolute one?

A relative poverty line is set in relation to a society's income distribution. The OECD commonly uses income below $\frac{1}{2}$ of the national median.

What determines the U.S. official poverty threshold?

The U.S. official measure compares pretax money income with thresholds that vary by family size and composition, but not by geographic location.

How does the Supplemental Poverty Measure account for housing costs?

The Supplemental Poverty Measure uses a broader resource definition and adjusts thresholds for housing costs by geography.

What does the poverty rate measure, and what does it miss?

The poverty rate, or headcount ratio, is the share of people below a poverty line. It does not show how far below the line they fall.

What does a poverty gap measure capture?

A poverty gap measure summarizes shortfalls from the poverty line, revealing the depth of poverty that a headcount rate alone cannot show.

What do deprivation indicators record?

Deprivation indicators record whether people lack goods, services, or social participation considered necessary for an adequate life.