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Measuring Poverty: A New Approach
Many other federally sponsored surveys besides SIPP and the March CPS provide income and poverty variables for analysis purposes: examples include the American Housing Survey, Consumer Expenditure Survey, National Health Interview Survey, National Medical Expenditure Survey. However, these surveys, which are focused on other topics, cannot usually afford the questionnaire space needed to collect all of the information needed for an accurate estimate of disposable money and near-money income. Research on the most appropriate set of income questions to include in such surveys would be useful. With limited space, it may be preferable to ask questions about expenses that need to be deducted from gross income, rather than to ask detailed questions about the sources of that income. Even more important is research on methods to develop poverty estimates from limited income information that approximate the estimates that would be obtained under a disposable income definition from a detailed survey like SIPP.
RECOMMENDATION5.4. Appropriate agencies should conduct research on methods to develop poverty estimates from household surveys with limited income information that are comparable to the estimates that would be obtained from a fully implemented disposable income definition of family resources.
Another source of income and poverty statistics is the U.S. decennial census. It provides data every 10 years for small geographic areas for which reliable estimates cannot be obtained in household surveys. Small-area poverty estimates serve many important purposes, for example, to allocate federal funds to local school districts. Questionnaire space in the decennial census is even more limited than in most surveys: the 1990 census asked about 8 types of income, compared with more than 30 in the March CPS and more than 50 in SIPP. No information was obtained about taxes, in-kind benefits, medical costs, child support, work expenses, or assets. We encourage research on methods to adjust census small-area poverty estimates to more closely approximate the estimates that would result from using our proposed family resource definition. Also, while recognizing the constraints on the census questionnaire, we urge serious consideration of adding perhaps one or two simple yes-no questions—for example, whether a family received food stamps or paid for child care in the past year—that would facilitate such adjustments.
RECOMMENDATION5.5. Appropriate agencies should conduct research on methods to construct small-area poverty estimates from the limited information in the decennial census that are comparable with the estimates that would be obtained under a fully implemented disposable income concept. In addition, serious consideration should be given to adding one or two questions to the decennial census to assist in the development of comparable estimates.