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Measuring Poverty: A New Approach
TABLE 1-4 Poverty Thresholds for Two-Adult/Two-Child (or Four-Person) Families Set by Various Methods for 1989-1993, as Developed and as Converted, in 1992 Dollars (Rounded)
Official Orshansky, 1963: Economy Food Plan times 3.0 updated by the change in the CPI
14,228
12,000
Expert Budget Thresholds
Adaptation by the panel of Orshansky (1963, 1965a): food times 4.4
20,700
17,400
Adaptation by the panel of Ruggles (1990): housing times 3.3
21,600
18,100
Weinberg and Lamas (1993), version A: food plus housing times 2.0
20,300
17,100
Weinberg and Lamas (1993), version B: food plus a somewhat higher housing standard times 2.0
21,800
18,300
Adaptation by the panel of Renwick and Bergmann (1993): budget for food, housing and household operations, transportation, health care, clothing, child care, and personal care
17,600
13,100
Schwarz and Volgy (1992): detailed budget for single-earner family
19,000
15,600
Relative Thresholds
One-half median after-tax income for four-person families: extension of series developed by Vaughan (1993)
18,000
15,100
Adaptation by the panel of Expert Committee on Family Budget Revisions (1980): one-half average expenditures of four-person consumer units
20,000
16,800
Subjective Thresholds
Gallup Poll "poverty" line: from Vaughan (1993)
17,700
14,900
General Social Survey "poverty" line
17,200
14,400
Suggested Threshold Range
Recommended concept developed by panel: percentage of median expenditures on food, clothing, and shelter, plus a little more
13,700–15,900
13,700–15,900
NOTE: All thresholds are after-taxes (except that survey respondents to the Gallup Poll and General Social Survey may not have answered the question on the poverty line in after-tax terms). See Chapter 2 (especially Table 2-5) for more information on each threshold.
a "As converted" amounts for Renwick and Bergmann and Schwarz and Volgy are from inspection of their budgets, which gives ratios of "as converted" to "as developed" amounts of 0.74 and 0.82, respectively. These ratios are low because the budgets assume that every family spends the maximum allowance for such items as work expenses. "As converted'' amounts for other thresholds are based on a ratio of 0.84, which is the ratio of "as converted" and "as developed" amounts for one-half median after-tax income of two-adult/two-child families. The "as converted" amount was obtained by subtracting one-half average work-related, child care, and out-of-pocket medical care expenditures as imputed by the panel to the March 1993 CPS for two-adult/two-child families with after-tax income around the median.
