Different countries have different ways to determine the poverty line. The European Union (EU) and many other

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Different countries have different ways to determine the poverty line. The European Union (EU) and many other countries use 60 percent of median household income as the poverty threshold. That is, if a household’s income is less than 60 percent of the median income, they are likely in the lower income bracket and are considered poor. In contrast, the Indian government examines the costs of living or food requirements. Using the cost of food as a guide, anyone spending more than INR 32 (Indian Rupee) per day in rural areas and INR 47 per day in urban areas is above the poverty line. Why do you suppose the poverty line is lower for rural areas than for urban areas? Discuss why determining the poverty line based on food requirements may be problematic. Are there any benefits to looking at the percentage of those below the median income instead? Are there any disadvantages of using this threshold?

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Principles Of Economics

ISBN: 9781292294698

13th Global Edition

Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster

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