Monday, May 26, 2008

Basic needs


Some measurements combine certain aspects of absolute and relative measures. For example, the Fraser Institute publishes a basic needs poverty measure for Canada. According to the Fraser Institute, "the basic-needs approach is partly absolute is limited to items required for long-term physical well-being and partly relative, reflecting the standards that apply in the individual's own society at the present time."The Fraser Institute's list of necessities for living creditably in Canada includes not only food, shelter, clothing, and health care, but also personal care, furniture, transportation, communication, laundry, and home insurance. It is criticized for not including any entertainment items like cable television, daily newspapers, and tickets to movies or sporting events.


Criticisms

Using a poverty threshold is problematic because having an income marginally above it is not substantially different from having an income marginally below it: the negative effects of poverty tend to be continuous rather than discrete, and the same low income affects different people in different ways. To overcome this problem, poverty indices are sometimes used instead; see income inequality metrics.
A poverty threshold relies on a quantitative, or purely numbers-based measure of income. If other human development-indicators like health and education are used, they must be quantified, which is not a simple (if even achievable) task.
Public and private charitable gifts are not counted when calculating a poverty threshold. For example, if a parent pays the rent on an apartment for an adult daughter, that money does not count as income to the daughter. If a church or non-profit organization gives food to an elderly person, that also does not count as income. Rea Hederman, a senior policy analyst in the Center for Data Analysis at the Heritage Foundation, in the United States, complained,
The official poverty measure counts only monetary income. It considers antipoverty programs such as food stamps, housing assistance, the Earned Income Tax Credit, Medicaid and school lunches, among others, "in-kind benefits" -- and hence not income. So, despite everything these programs do to relieve poverty, they aren't counted as income when Washington measures the poverty rate.