Orshansky developed the poverty threshold
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.