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Measuring Poverty: A New Approach
A particularly important problem to address is population undercoverage, particularly of low-income minority groups.
RECOMMENDATION5.2. To facilitate the transition to SIPP, the Census Bureau should produce concurrent time series of poverty rates from both SIPP and the March CPS by using the proposed revised threshold concept and updating procedure and the proposed definition of family resources as disposable income. The concurrent series should be developed starting with 1984, when SIPP was first introduced.
RECOMMENDATION5.3. The Census Bureau should routinely issue public-use files from both SIPP and the March CPS that include the Bureau's best estimate of disposable income and its components (taxes, in-kind benefits, child care expenses, etc.) so that researchers can obtain poverty rates consistent with the new threshold concept from either survey.
Data Sources for Income
The March CPS
The March CPS has several important advantages: large sample size (over 60,000 households); timeliness (reports and data files are typically available within 6 months of data collection); and the fact that analysts both inside and outside the Census Bureau are comfortable with the data. However, the March CPS has many limitations for measuring poverty with the proposed resource definition.21
The March CPS collects information for each adult household member on previous year's money income from a large number of sources and also asks about participation in the major in-kind benefit programs. However, its coverage of in-kind programs is not complete. Moreover, it does not ask about expenses that we propose to deduct from income, such as out-of-pocket medical care expenditures, child care costs, other work-related expenses, and child support payments. The March CPS also does not ask questions that would facilitate accurate estimation of income taxes, such as number of dependents (including those outside the household), whether the household itemizes deductions, etc. The March CPS does not ascertain characteristics of rented housing needed to value public subsidies or characteristics of owned housing needed to impute equivalent rents. Finally, it does not ask about assets or lump-sum receipts, which may be needed for supplementary short-term poverty measures, if not for the official annual measure.
For a detailed description of the March CPS, see Appendix B.