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Measuring Poverty: A New Approach
child support obligations. A recent estimate (Sorenson, 1993), using data from the 1990 SIPP panel, was that 14-18 percent of men aged 18-54 were noncustodial fathers. The range (rather than one number) comes from two factors—nonresponse to the question on parenthood and an apparent undercount of black noncustodial fathers relative to black custodial mothers. About 44 percent of noncustodial fathers paid child support, and, on average, the payments accounted for about 9 percent of their families' incomes (calculated from Sorenson, 1993: Table 3).36
The current poverty measure counts child support payments as income to the recipient families, but it does not subtract such payments from the income of the payers. Yet child support payments, which are not discretionary in the sense that gifts of money to another household would be, cannot be used to support consumption by members of a payer's current family. For consistency, we propose to subtract child support payments from the income of the paying family (and to continue to count them as income to the recipient family).
The March CPS does not ask about child support payments to another household, and no information is available with which to make a reasonable imputation. The addition of one two-part question—whether the respondent pays child support and, if yes, how much—would remedy this deficiency. SIPP, in contrast, has regularly asked about child support payments, and we used SIPP data to estimate the effect on the poverty rate of subtracting child support payments from the payer's income (see Chapter 5).
Home Ownership Services
Economists have long argued that estimates of families' economic resources, to be comparable for renters and homeowners, need to take account of the flow of services that owners obtain from their homes. Thus, analysts who estimate resources by using a consumption definition almost always add the rental equivalence value (or ''imputed rent") for homeowners to their other expenditures. The value added is net of owners' actual outlays for mortgage principal and interest, property taxes, and maintenance costs (i.e., nothing is added if owners already have mortgage, tax, and maintenance expenses that equal or exceed the estimated rental equivalence value). The intent is to measure housing consumption in a comparable manner for renters and owners by estimating what an owner would have had to pay in rent (not including
Presumably, some noncustodial mothers also pay child support, but Sorenson's analysis was restricted to men.