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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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POVERTY THRESHOLDS 100 worked to derive a monetary poverty standard that corresponds to low scores on a "deprivation index." Other researchers (e.g., Mack and Lansley, 1985; see also Callan, Nolan, and Whelan, 1992) have developed deprivation indexes to measure socioeconomic deprivation directly—that is, they define socioeconomic poverty as low scores on the index itself. Deprivation indexes commonly include a dozen or more behaviors and types of ownership that are viewed as indicative of full participation in one's society: for example, whether people have certain appliances for household maintenance, new (not second- hand) clothing, access to items necessary for getting and keeping a job (e.g., a telephone or a car or other transportation), or the ability to take a vacation.1 We agree with Townsend and others about the limitations of economic poverty measures as commonly defined. We argue in Chapter 1 for the need for measures of other forms of deprivation. It is important to have direct indicators of such types of deprivation as physical and mental illness, family abuse, unemployment, hunger, homelessness, risk of criminal victimization, and others. It is also important to have measures that characterize the standard of living, such as the extent to which certain types of consumption (e.g., automobiles, televisions) have diffused throughout society (see, e.g., the work of Mayer and Jencks, 1993) or the extent to which people engage in leisure activities. Our charge, however, was to consider the official U.S. poverty measure, which compares economic resources with a monetary threshold for economic consumption. We saw our primary task as twofold—to evaluate the usefulness of the current measure for informing policy makers and the public and to review alternative measures of economic or monetary poverty that could represent an improvement over the current measure. Although we did not do so, we certainly encourage work on measures of other kinds of deprivation, as well as work on measures (such as the Townsend deprivation index) that relate to, but are not the same as, an economic measure of poverty. RECOMMENDATIONS We recommend a revised threshold concept for the official U.S. measure of poverty. Two aspects of the proposed threshold concept need to be kept in mind when comparing it with other concepts: the definition of a reference family and the treatment of nondiscretionary expenses. 1 Sen (1983, 1987) and Atkinson (1985, 1989) discuss the philosophical basis for deprivation indexes that reflect specific, socially influenced types of activities and consumption that are needed to achieve basic capabilities (e.g., literacy, the ability to obtain a job). In the version developed by Mack and Lansley (1985), the index is limited to items that at least one-half of the respondents to a national survey claim to be "necessary" for minimal participation in society, and people who lack a given item because they do not want it are distinguished from people who lack it because they cannot afford it.

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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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