September 2001
Measuring Poverty
by Chris Sarlo
A very common criticism of the basic needs approach to measuring poverty goes like this: "The problem with the basic needs poverty lines is that they represent bare subsistence: no one should be living at bare subsistence." Unfortunately, the critique is not only incorrect, but is logically inconsistent.
Let me begin with the logical inconsistency. The function of a poverty line is to permit us to measure the extent of impoverishment in a nation or region. A poverty line is not a welfare payment or a support level. Students of poverty must decide what level of income or what level of consumption constitutes sufficient deprivation as to warrant the label "poor." The chosen poverty line then becomes a useful threshold that allows us to determine the number of poor people at any one time. To suggest that no one should be living at the chosen poverty line is irrelevant. Indeed, we have to assume that all of us want no one to be below the poverty line. However, we do not choose, as a poverty line, our goal for the poor. So logically, a normative statement about where people should or should not be is out of place in the determination of a "positive" or descriptive statement about the extent of poverty.
The second part of the opening statement concerns the matter of "subsistence." Subsistence is a standard of living that is sufficient only to keep a person alive. It means living on the edge of starvation. This level, I would argue, is not a useful representation of the "poverty" threshold. Poverty, we are informed by our most respected dictionaries (reflecting common usage), is a condition of being "without or lacking basic necessities"; "being poor, deprived of basic needs"; "without any luxuries." Living at the poverty line, therefore, would be a standard of living at which all of the necessities of life are just covered. This is quite different from subsistence. The following illustration might be helpful.
Consider a homeless person. This individual sleeps on the street or, occasionally when it is too cold to do so, in a shelter. The food he eats comes from food banks, soup kitchens, and table scraps from restaurants. His diet is not nutritionally balanced, but keeps him alive for the time being. The small amount of clothing he possesses is largely from charitable sources and is often inadequate in terms of appearance and comfort. None of the other necessities are routinely available to him (things like personal hygiene items, regular health care maintenance and medications, telephone, or transportation). This man merely "subsists" and is appropriately classified as living in deep poverty.
Now, in contrast, consider the living standard of someone just covering all of the basic necessities of life: for example, a university student. This person lives in a university residence. The accommodation is spartan and fairly inexpensive but clean, dry, warm, and safe. The food is also inexpensive but (generally) nutritionally balanced, palatable, and calorically adequate. The other basic needs are covered in similar fashion. The standard of living, while hardly luxurious, is at least healthy and sustainable. There is no lack of basic needs, but neither is there anything beyond that. This person is living at the basic needs poverty line.
A basic needs poverty line, as I have developed it, needs to have a "relative" aspect to be credible and useful. While the basic necessities of life have been constant throughout human history (food, shelter, clothing, and health care), the nature and quality of what is considered adequate in society has varied considerably over time. Shelter is a good example of this. A hundred years ago, typical shelter consisted of a small home or apartment with no running water, no indoor plumbing and, at best, a wood stove that provided little heat to any adjacent rooms. The sort of shelter that would be considered minimally adequate these days would be a home or apartment with sufficient rooms for the number of occupants, a furnace that provided warmth to all rooms, an indoor toilet and bathing facilities, hot and cold water, a refrigerator, stove, and modern furnishings of appropriate quality.
A basic needs approach to measuring poverty provides an alternative to
the purely relative approach that, essentially, measures inequality. Basic
needs poverty lines are well above the level of subsistence. The poverty
line, on the other hand, is a research tool that social scientists need
to help them identify the extent of an important social problem. The poverty
line cannot and should not be a standard of living we want for
those who are poor.
Chris Sarlo teaches economics at Nipissing University in North Bay, ON. He is the author of Poverty in Canada, published by The Fraser Institute.
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