TABLE 1-1 Elements of the Current and Proposed Poverty Measures


Current Measure

Proposed Measure

Threshold Concept

Food times a large multiplier for all other expenses

Food, clothing, and shelter, plus a little more

1992 level (two-adult/two-child family)


Suggest within range of $13,700-$15,900

Updating method

Update 1963 level each year for price changes

Update each year by change in spending on food, clothing, and shelter over previous 3 years by two-adult/two-child families

Threshold Adjustments    

By family type

Separately developed thresholds by family type; lower thresholds for elderly singles and couples

Reference family threshold adjusted by use of equivalence scale, which assumes children need less than adults and economies of scale for larger families

By geographic area

No adjustments

Adjust for housing cost differences by region and size of metropolitan area

Family Resource Definition (to compare with threshold to determine poverty status)

Gross (before-tax) money income from all sources

Gross money income, plus value of near-money in-kind benefits (e.g., food stamps), minus income and payroll taxes and other nondiscretionary expenses (e.g., child care and other work-related expenses; child support payments to another household; out-of-pocket medical care expenses, including health insurance premiums)

Data Source (for estimating income)

March Current Population Survey

Survey of Income and Program Participation

Time Period of Measurement


Annual, supplemented by shorter term and longer term measures

Economic Unit of Analysis

Families and unrelated individuals

Families (including cohabiting couples) and unrelated individuals

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