How is poverty defined?
Any individual with total income less than an amount deemed to be sufficient
to purchase basic needs of food, shelter, clothing, and other essential
goods and services is classified as poor. (For details, see "How
the Census Bureau Measures Poverty.") The amount of income
necessary to purchase these basic needs is the poverty line or threshold
and is set by the Office of Management and Budget (OMB). The 2003
poverty line for an individual under 65 years of age is $9,573. The
poverty line for a three-person family with one child and two adults
is $14,810. For a family with two adults and three children the poverty
line is $21,959. (For a complete list of poverty lines by size of
family and number of children, see the U.S. Census
Bureau’s
tables of Poverty
Thresholds.) Income includes cash income (pretax income and
cash welfare assistance), but excludes in-kind welfare assistance, such
as food stamps and Medicaid. Poverty thresholds are set for families
by size and composition, and they are updated annually to correct
for inflation.
Metro-nonmetro comparisons of poverty rates pose some difficult measurement
issues that are worth bearing in mind. As one example, U.S. poverty rates
do not make any adjustments for differences in cost of living across areas.
If it is assumed that the cost of purchasing basic needs is cheaper in
nonmetro areas, then the nonmetro poverty rate would be lower. There are
many other examples though, and the effect they would have on the area
poverty rates go in either direction. For example, the poverty thresholds
do not account for the possibility that basic needs will differ across
areas. It could be the case that transportation to work in nonmetro areas
is much more expensive than in metro areas where access to public transit
is greater. Similarly, the measure of poverty does not account for access
to other "public goods," such as health care, schooling, communication
networks, nor "public bads," such as noise and air pollution
which also differ systematically across metro and nonmetro areas.
|
