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Measuring Poverty: A New Approach
price changes) 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.
Our review below of poverty threshold concepts begins with an overview of our recommended concept, which leads us also to propose that the current level of the reference family threshold be reassessed (although we do not make a recommendation on the level). We then discuss in detail both expert-based poverty budgets and relative concepts developed both here and abroad. Because expert budgets are typically updated on a sporadic rather than a regular basis, with price adjustments made between realignments, we discuss types of price updating. We also review "subjective" poverty concepts, which derive poverty thresholds from survey questions. Finally, we return to the proposed concept, which is a hybrid of the budget and relative approaches and for which there is support provided by a time series of subjective thresholds developed for the United States.
Our conclusions about the threshold concept and the need to reevaluate the level of the current reference family threshold involve considerable elements of judgement. Although judgement enters into nearly all aspects of the poverty measure—from how to value in-kind benefits to how to specify the particular form of an equivalence scale—questions of the threshold concept and level are more inherently matters of judgement than other aspects of a poverty measure. In our deliberations on the threshold concept, we used the criteria we developed in Chapter 1 for a poverty measure—namely, that it be understandable, statistically defensible, and operationally feasible. Also, to the greatest extent possible, we used historical and statistical evidence about the implications of alternative concepts for official poverty statistics in the United States.
In this regard, we note that our review was largely limited to poverty measures that, like the current measure, relate to economic or material needs and resources and to threshold concepts that, correspondingly, express the poverty threshold in monetary terms. In other words, we reviewed measures of economic deprivation, in which poverty is defined as insufficient economic resources (e.g., money or near-money income) for minimally adequate levels of consumption of economic goods and services (e.g., food, housing, clothing, transportation).
Such measures have been criticized as too narrow in focus, even considered as measures of economic poverty. Townsend (1992:5, 10), for example, comments that people are "social beings expected to perform socially demanding roles as workers, citizens, parents, partners, neighbors, and friends." He argues that economic poverty should be defined as the lack of sufficient income for people to "play the roles, participate in the relationships, and follow the customary behavior which is expected of them by virtue of their membership of society." Toward this end, Townsend (1979, 1992) has