Without this basic distinction, we will not have a useful measurement of poverty and we will be unable to make legitimate comparisons of poverty over time and between different countries. In terms of specifics, a market-basket approach to poverty would certainly include on its list items like nutritious food, adequate shelter, clothing, and health care. These items would, I think, be on everyone's list of essential needs. While we certainly would like everyone to be enjoying more than just physical necessities, it seems to me that the further away we get from the basic needs, the less credible is our poverty line. There are some practical difficulties even with basic needs.
Similar issues arise with food, health care, and transportation.
If you wish to go with a market basket, lines must be drawn somewhere. The real advantage of a market-basket measure is that it gives us a clear picture of what kind of deprivation those classified as poor suffer. The poor are those who cannot acquire the full market basket on a regular basis. My advice to the federal government in their quest for a useful market-basket poverty measure would be to remember that setting poverty lines is not, as I have noted, an exercise in compassion. We need a useful measure.