lunch subsidies as income at the full subsidy value is not without problems (see Bureau of the Census, 1993a:ix). Thus, participating families have no choice about the type or quantity of food and may well value the benefit at less than the full subsidy value.
The procedure for valuing rent subsidies for people living in public or subsidized housing is complex (see Bureau of the Census, 1993a: B-1) because the March CPS ascertains residence in such housing but not the rents paid by residents or the rent subsidies. To estimate the subsidy values to add to the CPS income amounts, the Census Bureau uses the results of an analysis from the 1985 American Housing Survey (AHS), updated each year to reflect changes in the Consumer Price Index for housing. In the AHS analysis, the Census Bureau compared the actual gross rent (including utilities) paid by families in subsidized housing to the estimated market rent these families would have been expected to pay if their units had not been subsidized. The comparisons were carried out separately for families in three income groups: under $6,000, $6,000-$9,000, and $10,000 and over. The market rent estimates for each set of comparisons were developed by using the coefficients from a model that related gross rent for two-bedroom nonsubsidized units by region from the AHS to number of bathrooms, number of appliances, number of housing flaws, and presence of satisfactory neighborhood services. The relative subsidies estimated for two-bedroom units were assumed to apply to smaller and larger units.
For 1981-1985, the Census Bureau developed values for in-kind benefits using two other approaches in addition to market value: the recipient value approach and an approach called ''poverty budget shares" (see Bureau of the Census, 1986). The recipient value approach attempts to measure the value of a benefit to the recipient, which may be lower than the market value. However, in many cases it is difficult to measure recipient value. The poverty budget shares approach links the value of in-kind benefits to the current poverty measure by placing a limit on the value of specific benefits that is equal to the amount spent on the item by unsubsidized families and individuals with incomes near the poverty level. (The limit is equal to the lesser of the market value or the poverty budget share value.) The assumption is that recipients cannot use "extra" amounts of an in-kind benefit to meet their basic needs for other items.
Comparisons of estimates of nonmedical in-kind benefit values using the three methods indicate that the recipient value approach and, to a lesser extent, the poverty budget shares approach had less effect in lowering poverty rates than the market value approach. Thus, in 1985, the market value approach to adding values for food stamps, school lunches, and subsidized housing to money income reduced the poverty rate by 1.5 percentage points (from 14 to 12.5%)—an 11 percent reduction in the rate (Bureau of the Census, 1986: Table C). The recipient value approach reduced the rate by 1.2