survey responses about the poverty line or minimum income.)52 In the case of the proposed concept, a change in the quality of reporting of expenditures, whether an improvement or a deterioration in reporting, could alter the time series of poverty thresholds even though the underlying phenomena (i.e., real expenditures on food, clothing, and shelter) had not changed. The possibility of changes in the thresholds occurring as artifacts of fluctuations in reporting or other changes to the underlying CEX data will necessitate careful monitoring of the year-to-year consistency in the survey,

A second concern with the proposed concept is how the poverty thresholds behave as the economy moves through the business cycle. To facilitate evaluating the thresholds that are developed by the proposed procedure and their implications for poverty rates, it will be important to generate another, unofficial set of thresholds and rates based on them for some time. This other set should represent an initial set of thresholds (developed as we have outlined for the reference family and adjusted appropriately for different types of families and areas of the country) that are updated for price changes rather than for real changes in basic consumption. We believe that tying the thresholds to changes in consumption of the basic necessities of food, clothing, and shelter, together with the use of 3 years' worth of data to develop each year's reference family threshold, will moderate the sensitivity of the thresholds to changes in the business cycle. However, another unofficial set of thresholds that are updated simply for price changes will ensure that important information is available with which to assess the behavior of the official thresholds at the next regularly scheduled review of the poverty measure.


Although not as obvious, the same concern applies to the current concept, which maintains the thresholds unchanged in real terms through an inflation adjustment that is based on a continuing survey of consumer prices. However, the survey that is used to estimate the year-to-year change in the CPI is more robust than the CEX. There is a similar concern with the estimation of family resources for comparison with the thresholds, however they are updated: thus, changes in the quality of income reporting or other aspects of the March CPS could affect the time series of poverty rates under the current measure.

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