Program of the BLS is a case in point. For the mid-1940s, 1959, and 1966, BLS developed detailed budgets for particular family types at an "intermediate" standard of living (earlier termed a "modest but adequate" or "moderate'' standard). For 1967, BLS developed "higher" and "lower" budgets by scaling the intermediate budget up and down. In time intervals between budget revisions, the budgets were updated by repricing the budget, or, after 1966, by adjusting its cost by the change in the CPI.8

To develop the budgets, BLS used expert standards when they existed, including the USDA food plans (for the at home component of food) and housing standards developed by the predecessors to the U.S. Department of Housing and Urban Development (HUD). For other budget items (e.g., clothing, transportation), BLS analysts used econometric methods to determine the spending levels that demarcated "necessary" from "excess" spending. These methods proved quite problematic in concept and application: they often produced unclear results, which, just as for the expert standards, necessitated choices that could only be guided by considering actual spending preferences (see Expert Committee on Family Budget Revisions, 1980). Overall, on each occasion when BLS revised its family budgets, the baseline intermediate-level budget typically approximated median spending levels of American families at the time. In other words, the budget reflected changes in the standard of living, but on a periodic basis rather than every year as would occur with a conventional relative measure.

Poverty standards developed by experts have historically been conditioned by their time and place. Thus, the modern Economy Food Plan and its successor, the Thrifty Food Plan, are much more generous in terms of allowed quantities than the food components of minimum budgets that were developed in major American cities between 1906 and 1929; similarly, the implicit allowance for nonfood items in the original SSA poverty thresholds is considerably more generous than the allowance in the pre-1929 budgets, when incomes were lower and the percentage spent on food was, consequently, higher (Appelbaum, 1977).

Although budget-based poverty thresholds are essentially relative in their development, and hence not as different as one might suppose from thresholds that are explicitly relative, they do have some distinctive features. By incorporating one or more explicitly named commodities, budget-based thresholds convey some type of paternalistic or normative concept of "needs," which may be more appealing to policy makers and the general public than a purely relative concept, such as one-half median family income. Of course, people will argue about which commodities should be part of the budget and which should be left out: obtaining consensus may be easier to the extent that broad

8  

The BLS Family Budgets Program was discontinued in the early 1980s for lack of adequate funds to improve it.



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