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Measuring Poverty: A New Approach
itself (i.e., the standard of need), how it is updated over time, and the definition of families' resources that are available to meet this poverty standard. We considered the relevance of our proposed poverty measure—and other factors—for setting standards for government assistance programs. Although we offer few recommendations in this latter area, we try to illuminate and clarify the issues.
This overview presents the panel's findings, conclusions, and recommendations in a nontechnical way, for the general reader. The other chapters of this report discuss the issues involved in poverty measurement in detail: alternative concepts for developing and updating poverty thresholds (Chapter 2); alternative adjustments of the thresholds for different family circumstances, such as family size and geographic location (Chapter 3); alternative definitions of family resources (Chapter 4); data requirements for implementing the panel's proposed poverty measure and the effects on the distribution of poverty (Chapter 5); other issues in poverty measurement, such as the time period and unit of economic analysis covered (Chapter 6); and the potential relationship of the poverty measure to government assistance programs, both generally (Chapter 7) and, specifically, to the program for Aid to Families with Dependent Children (Chapter 8). Appendices provide additional information on specific topics.
In this overview we first explain what we mean by economic poverty, in contrast to other types of deprivation. We then describe the current official U.S. poverty measure and assess its adequacy. We also review alternative poverty measures, summarizing their merits and limitations. We base our choice of a measure on scientific evidence to the extent possible; however, we stress that the decision to recommend a particular measure (and the specific features of a measure) ultimately cannot rest on science alone, but also involves judgement. We describe the criteria that we used to guide our judgements. We then present our recommendations for the poverty measure. Finally, we present our findings and views regarding the applicability of our revised poverty measure for eligibility standards and payment levels in assistance programs for low-income families.
WHAT IS POVERTY?
We define poverty as economic deprivation. A way of expressing this concept is that it pertains to people's lack of economic resources (e.g., money or near-money income) for consumption of economic goods and services (e.g., food, housing, clothing, transportation). Thus, a poverty standard is based on a level of family resources (or, alternatively, of families' actual consumption) deemed necessary to obtain a minimally adequate standard of living, defined appropriately for the United States today.4
We refer to ''family resources" throughout this report, as distinguished from the country's economic resources, more broadly defined. Properly, the term should be "family or unrelated individual resources" (or needs) to accord with the units for which poverty is currently measured.