Final answer:
The U.S. poverty definition does not account for regional costs of living or non-cash benefits. It is based on cash income before taxes, using thresholds that vary by family size and composition, which may not reflect the actual living circumstances due to variations in living costs and resources across regions.
Step-by-step explanation:
The U.S. poverty definition does not account for differences in regional costs of living or non-cash benefits such as health care provided by Medicaid, housing vouchers, and food stamps. The official poverty measure is based on cash income before taxes, not including capital gains or noncash benefits. It uses a set of money income thresholds that vary by family size and composition to determine who is in poverty. Therefore, if a family's total income is less than the poverty threshold for a family of that size and composition, then they are considered to be in poverty. Relative poverty, the measure commonly used in the United States, can differ significantly from absolute poverty. Relative poverty looks at the financial status of individuals in relation to the wider community they live in, while absolute poverty looks at a universal standard, mostly applicable in developing countries, where the focus is on whether people can meet their basic needs like food, water, and shelter. This discrepancy raises questions about the effectiveness of a single poverty threshold in representing the diverse economic situations across different regions in the U.S.