A sociologist
Orshansky developed the
poverty threshold in
1964
She used 1950s household expenditure surveys which showed that a typical
American family spent about one third of their income on food.
She then had the
Department of Agriculture calculate a "food basket" which is defined as the minimal
nutritional requirement for a
healthy diet, and see how much money that would cost.
She took this amount and multiplied it by three to get the
poverty threshold. Families below this income are considered to be
poor.
This method is still used today.