National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)


Suggested Citation:"UPDATING THE POVERTY LINE." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
Page 387

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APPENDIX A 387 what scientific basis exists for concluding that food, clothing, and shelter are basic needs and health care or personal care services are not? Is it a scientific proposition that designer tennis shoes are a basic need but that the services of primary care physicians are not? What scientific basis exists for concluding that all types of food, clothing, and shelter, rather than only a subset, are basic needs? The report provides no answers to these questions. It does not attempt to establish a scientific basis nor does it present scientific evidence to support its choices. The panel's primary rationale is that "the United States has major assistance programs to provide food and housing…[and] clothing allowances historically were separately identified grants under Aid to Families with Dependent Children." This argument is faulty on several accounts. First, given the broad array of government-provided benefits, the same argument could be used to support the inclusion of any number of other commodities as basic needs. Health care, education, transportation, and laundry services are all currently provided by the federal government to the poor. Second, the fact that the government provided medical care to the poor on an entitlement basis long before it established entitlements for either food or housing assistance might suggest that medical care is every bit as basic a need as the former set of commodities. Also, the fact that the U.S. government spends an increasingly substantial proportion of its budget to provide medical insurance for the low- income population is a strong indication that medical care is viewed as a priority commodity. The foregoing should not be taken to mean, however, that scientific study has no role in this choice. Scientific analysis can play a significant role by evaluating methods to improve the quality of existing consumption data. It can establish criteria for evaluating the statistical accuracy of alternative poverty budgets. It can evaluate alternative sampling methodologies to improve a survey's ability to count certain groups, such as the homeless. Scientific analysis can ascertain living conditions of families at different income levels so that policy officials can determine the levels of income that should qualify as poverty. UPDATING THE POVERTY LINE The panel report recommends updating the poverty line annually by the growth rate in the median level of expenditures on food, clothing, and shelter, rather than by the Consumer Price Index as is the current practice. If adopted, the recommendation would fundamentally change the concept of poverty from an absolute standard to a relative standard. Under the recommended method, the poverty line would rise about 8 percent faster per year than under the current method. This recommendation, like the previously discussed one, cannot be deduced

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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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