Policy Documents

How Differences in the Cost of Living Affect Low-Income Families

Lewis Warne, and Marcelo Ostria –
November 12, 2013

In this policy analysis from NCPA, the authors note that in the United States, eligibility for government social benefits is based mainly on an absolute measure of poverty – the federal poverty level – which is an income threshold that varies by family size. The level is supposed to be the minimum income required for a household to buy such things as food, clothing and shelter. Because the cost of living varies widely across the United States, the federal poverty threshold is not a meaningful definition of minimum living standards. How much a family can buy with those benefits depends on where they live.