National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

Chapter: Related Measures

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Suggested Citation:"Related 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 410 shorter than a year. Under the current design, SIPP can provide limited longer term measures: for example, transitions in poverty status from one year to the next or estimates of the proportion entering poverty in the first year of a panel who are still poor 1 year or 1-1/2 years later. Under the proposed redesign to extend the length of each panel, SIPP would be able to support longer term measures with accounting periods of up to 4 years. (The 1993 SIPP Panel will be extended to cover a 10-year period, with annual interviews beginning after the first 3 years of interviews every 4 months.) State Estimates The CPS sample size and design make it possible to analyze poverty for geographic areas as well as population groups. The Census Bureau recently published state poverty rates (Bureau of the Census, 1992c: Table B). Standard errors for yearly estimates were small for large states (e.g., less than 5% for California and New York in 1991) but high for small states (e.g., 20% for Delaware and New Hampshire in 1991). Standard errors were smaller for 3-year average poverty rates (e.g., 3.5% for California and 15% for New Hampshire). SIPP is less able to provide reasonably reliable state poverty estimates with the current sample size of about 40,000 households (based on combining two panels) and a design that does not disproportionately sample smaller states. The redesign will increase the sample size to 50,000-55,000 households, but it still may not provide as reliable state estimates as does the March CPS. The proposed oversampling of low-income households in SIPP, beginning with the 1996 panel by using information from the 1990 census, may increase the reliability of the data for detailed poverty analysis. Related Measures The March CPS does not obtain information that would enable the development of alternative measures of economic well-being, such as an index of access to material goods or an index of health status and access to health care. SIPP also does not regularly obtain information that would permit the development of measures of access to a wide range of material goods. However, it does ascertain twice in each panel ownership of the residence and of a vacation home or undeveloped lot, together with information on the make, model, and year of each car, van, or truck owned by someone in the household and whether the household owns a motorcycle, boat, recreational, or other vehicle. Occasionally, a topical module has obtained additional information. For example, Wave 4 of the 1984 SIPP panel asked about housing conditions, including use of a list of consumer durables—range, oven, refrigerator, freezer, washer, dryer, dishwasher, black-and-white television, color television, air conditioning (see Radbill and Short, 1992: Table 10). Wave 6 of the 1991 SIPP panel and Wave 3 of the 1992 panel included a module on extended measures of well-being. This module has questions on consumer durables (e.g., whether the family has a clothes washer or dryer); living conditions

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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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