National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

Chapter: 5 Effects of the Proposed Poverty Measure

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Suggested Citation:"5 Effects of the Proposed Poverty Measure." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
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Page 247

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EFFECTS OF THE PROPOSED POVERTY MEASURE 247 5 Effects of the Proposed Poverty Measure This chapter presents our analysis of the difference it would make to poverty statistics to adopt the proposed measure in place of the current measure. This analysis has several objectives: to demonstrate the feasibility of implementing the proposed measure; to determine the reasons for important differences in the numbers and kinds of poor people between the proposed measure and the current measure; and to identify problems and areas for further research. We first describe the data sources and procedures that we used. Next, we present the results we obtained for income year 1992, for which we conducted the most extensive analysis. Two aspects that we explore in detail are the effects of using different equivalence scales for the poverty thresholds and the accuracy of our imputations for out-of-pocket medical care costs and their implications for poverty rates. We then briefly review the data, procedures, and results for the more limited analysis that we were able to conduct for earlier years. Finally, we consider the likely effects on poverty rates of using the Survey of Income and Program Participation (SIPP) instead of the March income supplement to the Current Population Survey (CPS). In conducting this analysis, we had to wrestle with a number of data problems. Hence, in this chapter we also discuss those problems and make recommendations for improvements in data sources that are needed for more accurate measurement of people's poverty status. The discussion covers data sources for deriving and updating the thresholds, as well as data sources for estimating family resources.

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Measuring Poverty: A New Approach Get This Book
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Each year's poverty figures are anxiously awaited by policymakers, analysts, and the media. Yet questions are increasing about the 30-year-old measure as social and economic conditions change.

In Measuring Poverty a distinguished panel provides policymakers with an up-to-date evaluation of

  • Concepts and procedures for deriving the poverty threshold, including adjustments for different family circumstances.
  • Definitions of family resources.
  • Procedures for annual updates of poverty measures.

The volume explores specific issues underlying the poverty measure, analyzes the likely effects of any changes on poverty rates, and discusses the impact on eligibility for public benefits. In supporting its recommendations the panel provides insightful recognition of the political and social dimensions of this key economic indicator.

Measuring Poverty will be important to government officials, policy analysts, statisticians, economists, researchers, and others involved in virtually all poverty and social welfare issues.

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