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Measuring Poverty: A New Approach
these kinds of expanded data collection efforts would entail considerable cost. We believe it is worth investigating the cost-effectiveness of additional data collection, in terms of the expected improvements in the data for such purposes as adjusting the poverty thresholds.
In general, we believe that data related to consumer expenditures and prices need to be improved in the United States. Not only is the CPI database limited in sample size and area coverage, but the CEX, which is used to determine the CPI market basket, is very limited—in sample size and in other ways—for purposes of measuring and understanding poverty, consumption, and savings. We discuss issues of needed data improvements for poverty measurement, including improvements in the CEX, in Chapter 5. Before that discussion, in Chapter 4, we consider an appropriate definition of family resources to compare with the poverty thresholds for determination of poverty rates for the nation, geographic areas, and population groups.