National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

Chapter: York Family Budget Unit

« Previous: Categorical Approaches
Suggested Citation:"York Family Budget Unit." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
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Page 119

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POVERTY THRESHOLDS 119 children had a parent at home to provide care. Today, many working families need to pay sometimes sizable amounts for child care in order to earn income. It seems preferable to deduct actual expenses from the income of those who pay for child care rather than to develop separate budgets for working families who pay for day care, working families who do not, and nonworking families. It also seems preferable to deduct from families' resources their actual out-of-pocket medical care expenses, which vary widely across the population (see Chapter 4 on these points). In comparing the categorical approach with the multiplier approach, the categorical method does not require setting a multiplier; also, it does not allow changes in the multiplier to drive the behavior of the thresholds over time. On the negative side, the categorical approach requires making a larger number of individual judgements about standards (e.g., how many family members should be expected to share a bedroom or whether to provide for disposable diapers or assume that the family has a washing machine). One can anticipate disagreements about the assumptions for each category and also the particular dollar levels that are chosen. Detailed Budget Approaches Extensive work on detailed budgets has been done abroad; one example is the work of the York Family Budget Unit in the United Kingdom. The United States also has experience with detailed budgets, most recently through the BLS Family Budgets Program.16 York Family Budget Unit The Family Budget Unit of York was established in 1985 to conduct research on the cost of living throughout the United Kingdom and on the economic requirements and consumer preferences of families of different compositions. The research on budget standards has sought to construct a series of "modest but adequate" and "low-cost" budgets for families in the United Kingdom, develop a means of updating the budgets, explore the relationship between living levels, develop equivalence scales from the budgets, and assess the practical and political applications of the budgets approach (Bradshaw, 1991). In developing the modest but adequate budget, the York analysts included such items as durable goods that were owned by more than half of the population. For the low-cost budget, they included items that more than two- thirds of the population viewed as "necessary" or that were owned by at least 75 percent of the population (Yu, 1992). The budgets comprise amounts 16 Extensive work on expert (or "standard") budgets was done in the United States from 1900 to 1940, although mostly outside the federal government (see Fisher, 1993).

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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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