chapter  12
19 Pages

A new model for constructing poverty thresholds

Rowntree's basic needs approach specifies a society's minimum standard of living to which everybody in that society should be entitled. Based on the consumer theory, this minimum standard can be defined by a minimum utility level u*, which allows the individuals to satisfy their calorie requirements and also their basic non-food requirements such as education, housing, health, and so on. Anyone whose actual enjoyment of utility is less than u* is identified as poor. A poverty line is a money metric value of u*.