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Measuring Poverty: A New Approach (1995)

Chapter: Shorter or Longer Term Measures

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Suggested Citation:"Shorter or Longer Term Measures." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
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APPENDIX B 409 65 percent of reported interest income (compared with 79% in the March CPS, which uses an improved imputation procedure). The March CPS estimate of interest income using the old imputation procedure was only 62 percent of the IRS estimate. Both SIPP and the March CPS fall much farther short of dividend and interest income aggregates when the comparison is made to the National Income and Product Accounts (NIPA); however, the NIPA estimates require extensive adjustments, which may not be complete, for comparability with household survey estimates (see Jabine, King, and Petroni, 1990: Table 10.3) Nonresponse rates to the questions on value of asset holdings in the topical modules are also very high, although lower than were experienced in the ISDP: 35-40 percent for value of own business, market value of stocks and mutual fund shares, and debt on these assets. After imputation, SIPP obtains higher estimates of equity in homes and motor vehicles in comparison with estimates of the Federal Reserve Board because of somewhat higher estimates of gross value and considerably lower estimates of debt in SIPP, but it obtains considerably lower estimates of equity in noncorporate business, value of financial assets, and consumer debt (see Eargle, 1990: Table D-2).7 Ability to Support Other Estimates Shorter or Longer Term Measures The March CPS provides annual measures of income and poverty. Almost no information is available with which to construct longer term measures. (Because of the rotation group design, one-half of the sample for one year's March supplement is in the sample for the next year's March supplement; hence, it could be possible to construct measures of poverty status over 2 years for this subsample.) Only very limited information is available with which to construct shorter term measures: information is obtained about months of receipt of food stamps and AFDC and about weeks worked, weeks unemployed, and weeks out of the labor force in the prior year. SIPP, because of its monthly (or 4-month) income information, can be used to construct poverty measures for months, quarters, or other periods 7 SIPP is not alone in experiencing quality problems with the collection of asset data. A number of panel surveys provide estimates of wealth that fall short of those from the Survey of Consumer Finances, a complete survey of household wealth that includes a household sample together with a sample of high-income households drawn from the IRS Statistics of Income file who agree to participate (see Curtin, Juster, and Morgan; 1989; Juster and Kuester, 1991). Recently, the Health and Retirement Study achieved more complete reporting of asset values by a technique called ''bracketing," in which holders of an asset who don't know or refuse to provide a value are asked if the value is above a certain amount; if yes, whether it is above another (higher) amount, and so on. High rates of response are obtained by this method, although the response categories are very broad (Juster and Suzman, 1993:16-20).

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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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