ECON 112 Lecture 10: l-10
Document Summary
Absolute poverty lines are based on absolute minimum standards of what families should be able to afford (either through income or service) in order to meet basic needs. Line helps measure number of people living in extreme poverty. As cost of living increases, poverty lines increase too. Start by defining an adequate basket of food, based on nutritional requirements. Using household survey data, identify typical basket of food barely meeting nutritional requirements. Add other expenses: clothing, shelter, medical care. Substantial decline in numbers of people living below . 90 a day. Varies a lot by region and groups. East asia and pacific has had greatest decline over period. Proportional number of poverty line people have decreased, but population grew more than that. If poor people get more money, poverty levels should go down. As we see, p2 has all 4 of these properties. The properties of the measure that is employed impact policymakers incentives. H: number of people who are poor.
