working life (and more) to accumulate assets. Again, I consider available measures of both income and assets.
Development Versus Production
In addition to these design considerations, it is important to distinguish between the data that are available for developing and evaluating an MCRI and the data available for production of a measure, as the data needs are different. In addition to the variables needed to construct the measure, production requires timely data that are representative of the entire U.S. population. Neither trait is critical for development and evaluation of an index, but the data needs are more extensive. Furthermore, both development and evaluation would be enhanced by longitudinal data that would allow examination of the consequences for persons flagged as high risk.
CPS ASEC and MEPS
Measures of Resources
The CPS ASEC is the official source for estimates of income and poverty for the U.S. population and will also be used to construct the SPM. The available data on income, then, include the official measure of money income—which is also used to estimate poverty—and the measure of disposable income that will be used for the SPM. This latter measure of income includes the cash value of noncash benefits (such as the Supplemental Nutrition Assistance Program, formerly the Food Stamp Program) while it subtracts taxes (which for some low-income families implies the addition of the refundable portion of a negative income tax), work-related expenses, and medical out-of-pocket expenditures (including premiums).
The potential inclusion of assets in the measure of resources is significant because the CPS collects no asset data. If, as expected, the CPS ASEC serves as the base data set for the MCRI, measures of liquid or near-liquid assets would have to be added to the survey or imputed from an external source. Imputation is a decidedly second-best option, because the point of including assets in the resource measure is that some people—particularly among the elderly—with relatively low income may nevertheless have sufficient assets to weather unexpected medical expenses. Income will not be a strong covariate of asset holdings among such persons, and it is not apparent that the CPS provides other strong covariates of asset accumulation. It should be assumed, therefore, that imputed assets will provide less value-added to an MCRI than directly measured assets. At the same time, adding new questions to the CPS to measure financial assets (property assets would probably not be needed for an MCRI as they are not very fungible, although a credit line based on home equity is a readily available resource