Explain what information is contained in the poverty rate statistic. Are there problems in using an absolute scale to measure poverty? If so, explain them.

The poverty rate is the percentage of the population whose family income falls below an absolute level called the poverty line. The poverty line is set by the federal government at roughly three times the cost of providing an adequate diet. There are several problems associated with measuring poverty using an absolute scale. For example, the cost of living may differ across broad geographic regions. Families may be better off than their income level indicates if they receive in-kind transfers. Finally, it is very difficult to measure a true "standard of living."