though they fall short of many of the properties considered desirable by those with expertise regarding poverty indexes. To compensate for these shortfalls and to provide a more complete picture of poverty, we are equally persuaded that there should be indicators of both the mean income level and the distribution of income among the poor. These indicators, however, should be kept separate from the head-count ratio, again, for reasons of understandability.

The Census Bureau already produces estimates of the mean poverty gap (or income deficit) each year for both all poor people and various groups, although it is not an official measure of poverty (see, e.g., Bureau of the Census, 1993c). This index measures the average difference between the poverty threshold and the income of the poor. In addition, the Census Bureau produces estimates of the distribution of income among the poor in terms of the proportion falling below specified fractions of the poverty threshold, such as the proportion below 75 percent or 50 percent. (The Census Bureau also publishes the proportion with incomes near poverty, e.g., those below 125% of the poverty threshold.) Together, these statistics provide understandable information on the average deprivation of the poor and the distribution of income among them.

We suggest that the Census Bureau continue to develop such statistics, although we believe that a measure of the average income of the poor would be more useful and understandable than the average poverty gap. Also, for statistics on average income (as well as for the poverty gap), it is most important to compute them by groups as well as for all poor people. This is important because different groups have different poverty thresholds, so that a mean income value of, say, $10,000, has different implications for a group with a poverty threshold of, say, $12,000 than for a group with a threshold of, say, $15,000. In this regard, it would be most useful to publish a weighted average poverty threshold, reflecting the composition of the poor population, to accompany statistics on the average income of the poor.17

Finally, it is important in the text of reports on poverty to point out limitations of specific indexes. We have noted that the head count and head-count ratio (and changes in them) do not provide any information about the underlying mean and distribution of the income of the poor. Similarly, a measure of mean income does not provide information about the income distribution. Also, it is important to caution about drawing unwarranted conclusions from particular indexes—for example, the poverty gap is not a measure of the amount of money that the government would have to spend to eliminate poverty (see Chapter 8, on behavioral responses to government

17  

We note that Orshansky (1965a:14), in her original work on the poverty measure, provided exactly this type of information, namely, average income of the poor for groups and average income of the poor for the total population, compared with an average weighted poverty threshold.



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