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Measuring Poverty: A New Approach
TABLE 2-1 Comparison of Updated Poverty Thresholds for a Two-Adult/Two-Child Family Using the Orshansky Multiplier, the Official Threshold, and Two Relative Thresholds, 1950-1992, in Constant 1992 Dollars
NOTES: The official 1992 threshold for a two-adult/two-child family (which, in constant 1992 dollars, applies to all earlier years) from Bureau of the Census (1993c: Table A).
a Based on calculating the share of food in the total after-tax expenditures of four-person consumer units, determining the multiplier (the inverse of the share), calculating the ratio of the multiplier in each year to that in 1960, and applying the ratio for each year to the official 1992 poverty threshold. The procedure assumes that the cost of the food component of the threshold remained constant in real terms and that Orshansky would have used the same food share and multiplier for a base year of 1960 as she did for her base year of 1963. Food shares and multipliers were obtained for 1960, 1972, 1980, and 1991 from tabulations provided to the panel from the 1960-1961, 1972-1973, 1980, and 1991 Consumer Expenditure Survey by the Bureau of Labor Statistics. The food share and multiplier for 1989 are assumed to be unchanged from 1988 (from Bureau of the Census, 1991: Table 718 for four-person consumer units). The food share and multiplier for 1950 relative to 1960 were derived by comparing food shares for these years for all urban families from Bureau of the Census (1975:323).
b For 1950, 1960, 1963, 1973, and 1989, calculated from Vaughan (1993: Table 1); for 1991 and 1992, calculated from Bureau of the Census (1993b: Table 13). All amounts were converted to 1992 dollars using the CPI-U (the CPI for urban families; from Bureau of the Census, 1993c: Table A-2).
c For 1950, 1960, 1963, 1973, and 1989, calculated from Vaughan (1993: Table 1), who estimated taxes for a two-adult/two-child family; for 1992, calculated from the March 1993 Current Population Survey; all amounts were converted to 1992 dollars using the CPI-U.