National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

Chapter: Income Data in the Decennial Census

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Suggested Citation:"Income Data in the Decennial Census." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
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Page 289

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EFFECTS OF THE PROPOSED POVERTY MEASURE 289 because a survey cannot ask about as many income components as are included in SIPP or the March CPS. Research with the March CPS, SIPP (and its predecessor, the Income Survey Development Program) has demonstrated that probing for more different sources of income elicits higher levels of reporting compared with asking broad categories (see Appendix B). Finally, and most important, we urge research by agencies on methods to develop poverty estimates for surveys with limited income information that are comparable to the estimates that would result from having complete information with which to calculate disposable money and near-money income. Comparisons of poverty rates from SIPP-based on a full implementation of the disposable income concept with rates based on a partial implementation (e.g., based on money income only, or money income, taxes, and nonmedical in-kind benefits only) could form the basis for developing appropriate adjustment factors for other surveys. Alternatively, agencies might come up with some rough-and-ready imputation procedures to use for estimating disposable income from limited survey information (e.g., a table for imputing out-of-pocket medical care expenditures based on type of health insurance and the number and age of family members). RECOMMENDATION 5.4. 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. Income Data in the Decennial Census Another source of income information is the decennial census, which provides data every 10 years for small geographic areas for which reliable estimates cannot be obtained in household surveys. The census also includes population groups, such as the institutionalized and the homeless, that are typically excluded from household surveys (although census estimates of the homeless are of doubtful quality). Income and poverty data from the census are used in many kinds of analyses; they also serve such important governmental purposes as allocation of federal funds to states and localities. For example, census estimates of the number of school-age children in poverty are used to allocate federal funds to school districts for programs to aid disadvantaged children. Questionnaire space in the decennial census is even more limited than in most surveys. Over the decades, the number of income questions has been expanded, but, in the 1990 census, only 8 types of income were ascertained, compared with more than 30 in the March CPS and more than 60 in SIPP. No information was obtained about taxes, in-kind benefits, medical costs, work expenses, child support payments, or assets. Consequently, it is not

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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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