Question

Why does the failure to adjust the poverty line for regional differences in living costs lead to an understatement of poverty in some states and an overstatement of poverty in others?

Answer 1

Failures to adjust the poverty line for the regional difference in living costs always tend to result in differences in the statement of poverty in different states with some states being overstated while others are understated.

Failures to adjust the poverty line for the regional difference in living costs always tend to result in differences in the statement of poverty in different states with some states being overstated while others are understated. This is because different regions have different living standards and costs which therefore call for differences in defining poverty lines: the universal way of defining poverty line result in over and understatement of poverty in different states.

The national poverty level measures tend to shape the understanding of poverty based on who is living under poverty, fluctuations in poverty up, and downs due to economic conditions, as well as policies, change. The dollar figures used in poverty estimation are always low and this results in arbitrary values that understate or overstate families in different states. The current federal poverty level measurement has flaws and therefore has criticism due to its flaws in causing understatement and overstatement in different states. The following reasons satisfy the criticism; the poverty threshold is low, and living standard keeps on changing with time as other states increases in economic development while others experience negative economic conditions leading to the relatively low poverty level.

The poverty thresholds are essentially arbitrary and therefore no longer support the family income relation in the current society as the one used represented around 40 years ago. In addition to that, resource counting in different regions and states results in both understates and overstates resources which therefore fail to reflect the effects of refundable tax credits, supplemental nutrition assistance program, as well as subsidized housing assistance. Last but not least, the poverty policies do not consider the impact for family budgeting of tax liabilities, health care costs, and work expenses.