National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

Chapter: Recommendations

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Suggested Citation:"Recommendations." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
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Page 281

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EFFECTS OF THE PROPOSED POVERTY MEASURE 281 variables on income and poverty for analysis purposes. We take a similar brief look at these issues for the decennial census, which provides small-area income and poverty statistics that are not obtainable in surveys. Finally, we consider needed improvements to data on consumption and expenditures. Deficiencies in the existing series must be remedied, if there is ever to be the possibility of using a consumption-based definition of family resources. Recommendations The proposal to define family resources for the poverty measure as disposable money and near-money income requires a wide array of high-quality information on families' demographic characteristics, money income, in-kind benefits, expenses, and assets. The March income supplement to the CPS, which to date has been the source of the nation's official poverty statistics, only partly meets these requirements now and is unlikely to meet them all in the future. Consequently, imputations would be required to fully implement the proposed family resource definition with March CPS data. In general, despite reporting problems with surveys, it is much preferable to have actual rather than imputed data. Imputation procedures are unlikely to reproduce fully the relationships and variations that exist in the population, and they may well introduce errors. There is an alternate source that we believe can provide the needed data, namely, the relatively new SIPP. From our comparative review of the current and likely future capabilities of the two surveys (see below), we conclude that SIPP should become the primary source of official income, poverty, and related statistics, beginning when a redesign of the survey takes effect in 1996. The SIPP design, questionnaire, and methodological research program should give priority to implementation of the poverty measure. To facilitate the transition to a new poverty measure with a new data source, the Census Bureau should produce concurrent series of poverty statistics from both SIPP and the March CPS. Also, many analysts will want to continue to develop poverty estimates from the March CPS so the Census Bureau should regularly issue public-use files from both the March CPS and SIPP that are suitable for this purpose. RECOMMENDATION 5.1. The Survey of Income and Program Participation should become the basis of official U.S. income and poverty statistics in place of the March income supplement to the Current Population Survey. Decisions about the SIPP design and questionnaire should take account of the data requirements for producing reliable time series of poverty statistics using the proposed definition of family resources (money and near-money income minus certain expenditures). Priority should be accorded to methodological research for SIPP that is relevant for improved poverty measurement.

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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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