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Measuring Poverty: A New Approach
adult under age 65. These irregularities come in part from the assumptions that Orshansky had to make about the ages of children in families when using the food plans.
We believe that these sorts of difficulties are always likely to be present in any method that is based on the construction of "ideal" or "expert" budgets for different family types, whether the budgets derive from food, as in Orshansky's procedure, or from a wider basket of goods as, for example, proposed by Ruggles (1990) and implemented by Renwick (1993a, 1993b).2 Expert poverty budgets are inevitably the result of families' actual spending patterns and a series of adjustments that reflect judgements about what a low-income family ''ought" to purchase. Because these budgets are always at least somewhat arbitrary, they impart no legitimacy to the equivalence scales that are implicit within them. We prefer a more direct approach that recognizes the arbitrariness by setting an equivalence scale formula directly and transparently and then using it to scale the threshold for a reference family type to derive poverty thresholds for other family types.
Alternative Equivalence Scales
Although there is wide agreement that different family types should have different poverty thresholds, that children have different needs from adults, and that larger households can benefit from economies of scale by sharing some items of consumption, there is little agreement about how the differences should be measured, and there is a wide range of scales in the literature. This section discusses some of these scales, as well as their conceptual and empirical basis.
Programmatic Equivalence Scales
In addition to the scale implicit in the official poverty thresholds, there are a number of other scales embodied in government programs or official pronouncements; see Table 3-2. The Bureau of Labor Statistics (BLS) estimated its own scale for the Family Budgets Program.3 For this program, BLS estimated higher, intermediate, and lower budgets for two types of reference families: (1) a four-person family living in an urban area and comprising a husband aged 38 and employed full-time, a homemaker wife (no age speci-
Renwick (1993b: Table 6) presents budgets for single-parent families of size two to size seven, consisting of separately developed estimates (including assumptions about scale economies) for food, housing, household operations, health care, transportation, clothing, and personal care. One key assumption that shapes her implicit equivalence scale is that a parent needs her or his own bedroom and that only two children can share a bedroom.
BLS last respecified the family budgets for 1966-1967 and last published them, updated for price changes, for 1981.