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Measuring Poverty: A New Approach
standard of economic deprivation. It is also argued that relative poverty thresholds do not provide a stable target against which to measure the effects of government programs because they change each year in response to increases or decreases in real consumption levels instead of remaining fixed in real terms. However, it is important to stress that relative poverty thresholds are not so distinct as one might imagine from thresholds developed according to expert standards of need: the latter also embody a great deal of relativity and subjectivity (see below). Moreover, it is rare for expert (or other) standards to be maintained in absolute terms over long periods of time. The more common experience is that an old standard is replaced after some period of time by a new standard that is higher in real terms (in this regard, see Fisher, 1993, for the history of unofficial poverty budgets in the United States prior to Orshansky). In other words, updating for real growth in consumption occurs, but at occasional intervals rather than on a regular basis.
Expert Budgets: The U.S. Experience
Expert budgets typically involve the development of standards for a large number of goods and services (e.g., food, clothing, shelter, utilities, transportation, personal care) with perhaps a small ''other" or "miscellaneous" category. Although not an expert budget in this sense, the original U.S. poverty thresholds were based on expert standards for a key commodity, food. The experts were USDA home economists, and the poverty budget developed by Orshansky at SSA was based on the USDA estimates of the cost of the Economy Food Plan with a multiplier to account for other consumption items.
Relativity and subjectivity entered into the determination of both the food component and the multiplier for the original poverty thresholds. The Economy Food Plan was developed by considering the food-buying patterns of lower income families, as well as nutritional requirements. The USDA experts could have developed the Economy Food Plan at an even lower cost level and still provided for nutritional balance if they had been willing to ignore the eating patterns of Americans, who, even at lower income levels, showed a preference for meat as well as rice and beans. They could also have developed the Economy Food Plan at a higher cost level to allow for somewhat greater variety of diet and an occasional restaurant meal. That is, they had to make judgements that cannot be supported by nutritional science alone; they were guided in these judgements by data on Americans' actual food choices. Orshansky then explicitly introduced another element of relativity into the thresholds by choosing to use a multiplier that was based on the spending patterns of the average American family rather than on expert standards for other needed budget items.
Subjective judgement and relativity cannot be avoided by developing a detailed budget that eschews the use of a multiplier. The Family Budgets