Understating poverty

Understating poverty

The U.S. poverty threshold in particular has been criticized for understating poverty, by using an outdated "basket of goods" to set the standard. While cost of these goods is adjusted for inflation every year, the basket of goods itself remains the same.


It excludes the cost of items that were rare among poor Americans in the 1950s, but which are now common, such as a telephone, a car and a microwave oven. Mollie Orshansky, who devised the original goods basket and methodology to measure poverty, used by the U.S. government, in 1963-65, suggested an updated list in 2000. She found that the point where a person is excluded from the nation's prevailing consumption patterns, is roughly 170% of the official poverty threshold.
Furthermore, in developed countries, such as the U.S., poverty tends to be cyclical. Thus, the poverty line only indicates how many people are poor at any one point in time. It does not report the number of people who will experience poverty during their lifetimes.


In the U.S. for example, roughly 12%-13% fall below the poverty line in any given year, but roughly 40% will experience poverty at some point over a ten-year timespan.

A range of factors, which poor people identify as part of poverty includes :
• Precarious livelihoods
• Excluded locations
• Physical limitations
• Gender relationships
• Problems in social relationships
• Lack of security
• Abuse by those in power
• Dis-empowering institutions
• Limited capabilities and
• Weak community organisations.
Causes of poverty includes many different factors have been cited to explain why poverty occurs. However, no single explanation has gained universal acceptance.