What Is Poverty?
Economists measure wealth and poverty in several ways. The three most common measures are income, assets (meaning accumulated wealth in the form of money, securities, and real estate), and socioeconomic metrics. Measures in the last category go beyond financial data to account for health, nutrition, infant mortality, sanitation, and other aspects of human well-being.
In this chapter, I will usually examine wealth and poverty in terms of income. Data on income is readily available, reliable, and relevant, especially in discussing poverty in the United States, where inherited wealth is a minor factor and most people live on wages and salaries.
It’s useful to think of wealth and poverty in relation to one another. That’s because ...