Measuring Poverty: A New Approach (Panel on Poverty and Family Assistance)

Each year's poverty figures are anxiously awaited by policymakers, analysts, and the media. Yet questions are increasing about the 30-year-old measure as social and economic conditions change.
In Measuring Poverty a distinguished panel provides policymakers with an up-to-date evaluation of

• Concepts and procedures for deriving the poverty threshold, including adjustments for different family circumstances.
  
• Definitions of family resources.
  
• Procedures for annual updates of poverty measures.
  

The volume explores specific issues underlying the poverty measure, analyzes the likely effects of any changes on poverty rates, and discusses the impact on eligibility for public benefits. In supporting its recommendations the panel provides insightful recognition of the political and social dimensions of this key economic indicator.
Measuring Poverty will be important to government officials, policy analysts, statisticians, economists, researchers, and others involved in virtually all poverty and social welfare issues.

• Front Matter
• Summary and Recommendations
• THE CURRENT POVERTY MEASURE: EVALUATION
• RECOMMENDATION: A NEW POVERTY MEASURE
• SETTING AND UPDATING THE POVERTY THRESHOLD
• ADJUSTING THE THRESHOLD
• DEFINING FAMILY RESOURCES
• NEEDED DATA
• OTHER ISSUES IN POVERTY MEASUREMENT
• RELATING THE POVERTY MEASURE TO ASSISTANCE PROGRAMS
• 1 Introduction and Overview
• WHAT IS POVERTY?
• Development of the Measure
• Adequacy of the Current Measure
• Composition of Families and Households
• Geographic Differences in Prices
• Taxes
• Increase in the Standard of Living
• Absolute and Relative Thresholds
• Expert Budgets: The U.S. Experience
• Other Approaches
• Definitions of Family Resources
• Criteria for a Poverty Measure
• Statistical Defensibility
• A New Poverty Measure
• Periodic Reviews
• The Poverty Threshold
• Updating the Thresholds
• Threshold Concepts: Assessment
• Recommended Threshold Concept and Updating
• Setting the Initial Threshold
• Adjusting the Thresholds - Equivalence Scale
• Adjusting the Thresholds - Geographic Variations
• Defining Family Resources
• In-Kind Benefits - Nonmedical
• Medical Care Costs
• Taxes
• Work-Related Expenses
• Assets
• Effects
• Distributional Effects
• Effects of Selected Components
• Effects on the Poverty Rate
• Time Trends
• Needed Data
• Time Period
• Unit of Analysis
• Other Measures
• Need Standards for Programs That Use the Official Measure
• Need Standards for AFDC
• The Poverty Measure and AFDC Benefit Standards
• 2 Poverty Thresholds
• THRESHOLD CONCEPTS
• RECOMMENDATIONS
• The Two-Adult/Two-Child Reference Family
• Updating the Thresholds
• Setting the Initial Threshold
• EXPERT BUDGETS
• The Original U.S. Poverty Thresholds
• The Orshansky Multiplier over Time
• Other Multiplier Approaches
• Categorical Approaches
• York Family Budget Unit
• BLS Family Budgets Program
• Conclusions
• Updating for Price Changes
• RELATIVE THRESHOLDS
• International Examples
• U.S. Expert Committee on Family Budget Revisions
• Issues in Deriving Relative Thresholds
• Behavior of Relative Thresholds Over Time
• SUBJECTIVE THRESHOLDS
• Research Findings
• Behavior of Subjective Thresholds Over Time
• CONCLUSIONS
• IMPLEMENTING THE PROPOSED APPROACH
• Analysis of 1989-1991 CEX Data
• The Basic Bundle
• The Multiplier
• The Basic Bundle and Multiplier Together
• Comparison with Other Thresholds
• Analysis Over Time
• Further Evaluation
• The Concept of an Equivalence Scale
• Overview and Recommendation
• The Current Equivalence Scale
• Programmatic Equivalence Scales
• Behavioral Scales
• The Engel and Iso-Prop Methods
• The Rothbarth and Other Methods
• Subjective Scales
• Recommended Procedure
• Overview and Recommendations
• Feasibility and Desirability
• Research Findings on Price Differences
• Estimating Geographic Variations in Housing Costs
• HUD Fair Market Rents
• BLS Family Budgets Program
• Hedonic Models
• Discussion
• Recommended Approach
• Updating the Housing Cost Index
• Further Research
• OVERVIEW AND RECOMMENDATION
• Resources as Disposable Income
• Adjusting Income, Not Thresholds
• Recommendation
• Resources as Consumption or Expenditures
• Implications
• Assessment
• A Crisis Definition of Resources
• Methodological and Measurement Issues
• Implications
• Assessment
• Money Income
• Nonmedical In-Kind Benefits
• Census Bureau Valuation Procedures
• Assessment of Valuation Approaches
• Medical Care Needs and Resources
• Proposed Approach: Recommendation
• Current Poverty Measure
• Adding Health Insurance Benefits to Income
• A Comprehensive Single Index
• A Two-Index Poverty Measure
• Separate Measures of Medical Care Risk and Economic Poverty
• Taxes
• Census Bureau Tax Estimation Procedures
• Assessment
• Child Care
• Other Work-Related Expenses
• Child Support Payments
• Home Ownership Services
• 5 Effects of the Proposed Poverty Measure
• Poverty Measure Alternatives
• Imputation Procedures for Proposed Resource Definition
• In-Kind Benefit Values and Taxes
• Out-of-Pocket Medical Care Expenditures
• Other Work-Related Expenses
• Effects with a Constant Poverty Rate
• The Overall Rate
• Groups
• Marginal Effects
• Equivalence Scale Effects
• Accuracy of Medical Care Expense Imputations
• Data and Procedures
• Results
• Poverty Rates Using SIPP
• DATA SOURCES
• Recommendations
• The March CPS
• The Alternative of SIPP
• Orienting SIPP to Poverty Measurement
• Transition
• Income Data in Other Surveys
• Income Data in the Decennial Census
• Expenditure Data
• Recommendation
• Short-Term Measures
• Long-Term Measures
• Unit of Analysis
• Discussion
• Unit of Presentation
• INDEXES OF POVERTY
• Recommendation
• Alternative Indexes
• Indexes with Alternative Resource Definitions
• THE LIMITED SCOPE OF MEASURING ECONOMIC POVERTY
• 7 Use of the Poverty Measure in Government Assistance Programs
• RECOMMENDATION
• Overview
• Head Start
• WIC
• Food Stamps
• The Thresholds
• Simplified Determination of Disposable Income
• Full Determination of Disposable Income
• Other Issues
• 8 The Poverty Measure and AFDC
• DETERMINING PROGRAM BENEFIT LEVELS
• Proposals for AFDC Minimum Benefits: A Brief History
• A Supplementary Program with a National Benefit Standard - Food Stamps
• A National Minimum Benefit Standard for AFDC
• Issues in Program Benefit Design
• Budget Constraints
• Targeting Strategies and Preferences
• Program Interactions
• Work Effects
• Migration Effects
• Summary
• Federal-State Cost Sharing
• Summary
• Recommendation
• Program Regulations
• Standard Setting in the 1970s
• Standard Setting in the 1980s
• Differences in Need Standards and Benefits
• Differences in Equivalence Scales
• Trends in Need Standards and Benefits
• Conclusions
• Comparative Advantage of the Proposed Poverty Measure
• Program Interactions
• Implications of Updating for Costs and Caseloads
• Summary
• APPENDICES
• APPENDIX A Dissent
• MEASURING THE POVERTY LINE
• UPDATING THE POVERTY LINE
• MEASURING FAMILY RESOURCES: THE ISSUE OF MEDICAL CARE
• REFERENCES
• Consumer Expenditure Survey
• Design and Use
• Content of the Interview Survey
• Design
• Content
• Design
• Content
• Design
• Content
• Quality of Income Data
• Taxes
• Medical Benefits/Costs
• Asset Holdings
• Shorter or Longer Term Measures
• Related Measures
• Quality of Income Data
• Population Undercoverage
• Household and Person Nonresponse
• Item Nonresponse
• Other Sources of Error
• Aggregate Comparisons
• APPENDIX C The Interdependence of Time and Money
• Illustration
• Expenditure Data
• Discussion
• Time Poor: A Measurement
• Calculating Earnings Capacity
• CONCLUSION
• APPENDIX D Assistance Programs for People with Low-Incomes
• Maternal and Child Health Services Block Grant (Title V)
• Medicaid
• Food Stamps
• Special Milk Program
• Vocational Education Opportunities, Disadvantaged Activities (Perkins Act)
• Job Corps
• Low-Income Home Energy Assistance Program (LIHEAP)
• Aid to Families with Dependent Children
• Section 8 Low-Income Housing Assistance and Low-Rent Public Housing
• Supplemental Security Income
• Pensions for Needy Veterans, Their Dependents, and Survivors
• References and Bibliography
• Biographical Sketches of Panel Members and Staff
• Index