What is a significant factor that determines the poverty threshold?

• A. Market value of goods
• B. Cost of living in a specific region
• C. Average income level of the community
• D. Public's perception of poverty

Answer: (B)

A significant factor that determines the poverty threshold is the cost of living in a specific region. The poverty threshold needs to accurately reflect the economic realities faced by individuals and families, which can vary widely based on geographic location. In areas where the cost of living is high, the threshold must be adjusted to account for increased expenses associated with necessities such as housing, food, healthcare, and transportation. This ensures that the measurement of poverty is relevant and meaningful, considering that what constitutes a livable income can differ dramatically from one region to another.

For instance, living expenses in urban centers are typically much higher than in rural areas, so the poverty threshold must reflect those differences to realistically assess who is living in poverty. As a result, variations in the cost of living across different areas are critical to understanding and defining poverty levels accurately.