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KMID : 1001320100370020029
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Social Welfare Policy
2010 Volume.37 No. 2 p.29 ~ p.50
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A study on the problems of the budget standards method of producing minimum cost of living: focusing on the issue of arbitrariness
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Lee Seung-Ki
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Abstract
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This article discusses problems attached to the budget standards method of producing minimum cost of living, focusing the issue of arbitrariness and then suggest a relative income method as an alternative. This article points out that the budget standard method has a inherent problem of arbitrariness when determining necessities and thus influenced heavily by the given national budget. As alternatives, two methods, the multiplier method and the relative income method, are explored because the two can be employed to give a minimum cost of living. Multiplier method, however, is discussed that it has a limitation to overcoming arbitrariness since judgements of experts need to be done when determining price, quantity and quality of food. Although the relative method has a weakness of not saying theoretically about how the percentage of mean or median income should be set up, it is discussed that it has a strength of overcoming arbitrariness. This is because the distribution of income which relative income method uses is about the fact, not judgements which lead to arbitrariness. Thus, This article suggests that relative income method need to replace the budget standard method for producing a minimum cost of living.
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KEYWORD
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minimum cost of living, poverty line, poverty, poverty policy
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