Income deficit
Encyclopedia
The Income Deficit is the difference between a single person or family's income
and its poverty threshold
or poverty line, when the former is exceeded by the latter. Data on the income deficits of various members of a population allow for the construction of one type of measurement of income inequality in that population. Individuals or families that fall below the line are considered to be in poverty
whereas families that fall above are not. The income deficit is one of two measures that are used to determine a person or family's income distance from the poverty threshold,the other being a ratio rather than a difference.
to reflect the updated cost of living in particular areas. In a typical year, it is estimated that nearly 12% of Americans are living below the poverty threshold. Poverty thresholds depend on the number of people living in the household.
The total United States deficit runs to the figure of over $700 billion. This debt is the biggest ever seen in world history says Maurice Obstfeld
, professor in economics at the University of California, Berkeley
.
Income
Income is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings...
and its poverty threshold
Poverty threshold
The poverty threshold, or poverty line, is the minimum level of income deemed necessary to achieve an adequate standard of living in a given country...
or poverty line, when the former is exceeded by the latter. Data on the income deficits of various members of a population allow for the construction of one type of measurement of income inequality in that population. Individuals or families that fall below the line are considered to be in poverty
Poverty
Poverty is the lack of a certain amount of material possessions or money. Absolute poverty or destitution is inability to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live...
whereas families that fall above are not. The income deficit is one of two measures that are used to determine a person or family's income distance from the poverty threshold,the other being a ratio rather than a difference.
Poverty threshold
The poverty threshold in the U.S. is updated each year by the U.S. Census Bureau. The number is adjusted according to inflationInflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
to reflect the updated cost of living in particular areas. In a typical year, it is estimated that nearly 12% of Americans are living below the poverty threshold. Poverty thresholds depend on the number of people living in the household.
Problems with income deficit
While the poverty line reflects the general circumstances of a household (specifically, number of people and location), it does not capture the household's individual circumstances, such as health problems.US Income Deficit
In the United States, the census bureau separates data collected into several different categories. Each category is then separated even further by number of children, age of children, yearly salary, social security income, et cetera. The data below shows the average of each subcategory within the three larger ones. Data is from the year 2000.- Families have a mean income deficit of $7,247.
- Married-couple families have a mean income deficit of $6,946.
- Families with female householder and no male present have a mean income deficit of $7,562
The total United States deficit runs to the figure of over $700 billion. This debt is the biggest ever seen in world history says Maurice Obstfeld
Maurice Obstfeld
Maurice Moses "Maury" Obstfeld is a professor of economics at the University of California, Berkeley.He is well known for his work in international economics. He is among the most influential economists in the world according to IDEAS/RePEc....
, professor in economics at the University of California, Berkeley
University of California, Berkeley
The University of California, Berkeley , is a teaching and research university established in 1868 and located in Berkeley, California, USA...
.