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Measuring Poverty: A New Approach (1995)

Chapter: Behavior of Subjective Thresholds Over Time

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Suggested Citation:"Behavior of Subjective Thresholds Over Time." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
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Page 137
Suggested Citation:"Behavior of Subjective Thresholds Over Time." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
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Page 138
Suggested Citation:"Behavior of Subjective Thresholds Over Time." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
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Page 139

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POVERTY THRESHOLDS 137 on a consistent basis, however, they could provide useful information with which to evaluate the official methodology for updating the thresholds. Behavior of Subjective Thresholds Over Time In the United States there are data available with which to derive subjective thresholds on a reasonably consistent basis. The Gallup Poll has asked samples of adults the following question for most years between 1946 and 1989: "What is the smallest amount of money a family of four (husband, wife and two children) needs each week to get-along in this community?" Vaughan (1993) assembled the results from the Gallup Poll and various other sources for years between 1947 and 1989, converting the average weekly amounts to average yearly amounts.35 At the request of the panel, Gallup included the same get-along question in its August 1992 poll, and we included the average weekly amount (converted to an annual basis) with Vaughan's numbers; see Table 2-4. The resulting time series indicates that the get-along amount has increased over time (in constant 1992 dollars): from a level of about the same as that of the official 1992 two- adult/two-child poverty threshold in the period 1947-1950 to well above that threshold subsequently, reaching 176 percent of the threshold by 1992. In other words, the Gallup get-along amount has increased with increases in real income. It also seems to clearly represent a higher level than a poverty standard (but still below median income). In this regard, the fact that the get-along amount and the official poverty threshold were about the same in the late 1940s suggests that the poverty line, which was viewed as about "right" when it was adopted in the 1960s, would have been viewed as too high earlier in the post- World War II period. In 1989 the Gallup Poll asked the get-along question in May, and then in July-October asked separate samples of adults a question designed specifically to elicit poverty levels: "People who have income below a certain level can be considered poor. That level is called the 'poverty line.' What amount of weekly income would you use as a poverty line for a family of four (husband, wife, and two children) in this community?" Vaughan used the relationship between the average of the poverty responses and the average of the get-along responses in 1989 (the ratio of the two means was 71.8%) to construct a series of subjective poverty thresholds for the period 1947-1989 from the get-along data. At the request of the panel, Gallup included the poverty question in its August 1992 poll; the average poverty amount was 62.8 percent of the 35 For some years, only medians are readily available. Ordinarily, one would prefer medians to means; however, in the early years of the Gallup series, there is evidence of instability in the medians due to rounding of amounts by respondents. Also, median figures published by Gallup are limited to nonfarm households.

POVERTY THRESHOLDS 138 TABLE 2-4 Subjective Poverty Thresholds for a Four-Person Family Derived from Survey Data, 1947–1993, in Constant 1992 Dollars Average of Responses to Survey Questions Dollar Amount, Four-Person Family Percent of Official Threshold Year "Get-Along" "Poverty" Level "Get-Along" "Poverty" Level Level Level 1947 14,785 10,620 103.9 74.6 1948 15,718 11,288 110.5 79.3 1949a 15,244 10,947 107.1 76.9 1950 14,525 10,432 102.1 73.3 1951 15,433 11,084 108.5 77.9 1952 17,069 12,256 120.0 86.1 1953 16,342 11,734 114.9 82.5 1954a 17,316 12,434 121.7 87.4 1955 N.A. N.A. N.A. N.A. 1956 N.A. N.A. N.A. N.A. 1957 19,412 13,945 136.4 98.0 1958a 20,744 14,894 145.8 104.7 1959 20,809 14,941 146.3 105.0 1960 20,097 14,433 141.2 101.3 1961a 20,308 14,584 142.7 102.5 1962 20,083 14,420 141.2 101.4 1963 19,844 14,250 139.5 100.2 1964 20,086 14,424 141.2 101.3 1965 N.A. N.A. N.A. N.A. 1966 21,842 15,684 153.5 110.2 1967 24,246 17,411 170.4 122.4 1968 N.A. N.A. N.A. N.A. 1969 23,457 16,844 164.9 118.4 1970a 23,692 17,013 166.5 119.6 1971 24,499 17,591 172.2 123.6 1972 N.A. N.A. N.A. N.A. 1973 24,483 17,582 172.1 123.6 1974 25,009 17,960 175.8 126.2 1975 a 21,833 15,678 153.5 110.2 1976 23,976 17,218 168.5 121.0 1977 23,958 17,204 168.4 120.9 1978 24,505 17,597 172.2 123.7 1979 24,520 17,607 172.3 123.8 1980a 22,135 15,895 155.6 111.7 1981 24,400 17,522 171.5 123.2 1982a 22,983 16,505 161.5 116.0 1983 23,073 16,569 162.2 116.5 1984 23,452 16,841 164.8 118.4 1985 23,663 16,992 166.3 119.4 1986 24,230 17,399 170.3 122.3 1987 N.A. N.A. N.A. N.A. 1988 N.A. N.A. N.A. N.A.

POVERTY THRESHOLDS 139 Average of Responses to Survey Questions Dollar Amount, Four-Person Family Percent of Official Threshold Year ''Get-Along" "Poverty" Level "Get-Along" "Poverty" Level Level Level 1989 24,653 17,703 173.3 124.4 1990 N.A. N.A. N.A. N.A. 1991a N.A. N.A. N.A. N.A. 1992 25,028 15,714 175.9 110.4 1993 N.A. 17,228 N.A. 121.1 NOTES: "Get-along" levels for 1947-1989 are from Gallup Poll data assembled by Vaughan (1993: Table 1). Get-along amounts for most years are mean weekly responses, annualized on the basis of a 52-week, 364-day year. Get-along amounts for 1970, 1973, 1975, 1977, and 1980 are median amounts for persons in nonfarm households. See Vaughan (1993) for more details on sources. "Poverty" levels for 1947-1989 are from Vaughan (1993: Table 1), derived by assuming a constant relationship of the poverty amount to the get-along amount of 71.8 percent. (This level was observed in 1989, when, in addition to asking one sample the get-along question, the Gallup Poll asked separate samples a question on the poverty level; see O'Hare, 1990, and O'Hare et al., 1990:18.) See text for wording of the get-along and poverty questions. Get-along and poverty levels for 1992 are from Gallup Poll questions administered to the same sample of persons (sample size of 901); amounts are annualized mean weekly responses (derived from tabulations provided to the panel). The poverty level for 1993 is from the General Social Survey (sample size of 1,385) of the National Opinion Research Center; amounts are annualized mean weekly responses (derived from tabulations provided to the panel, excluding two outliers). All dollar values were converted to constant 1992 dollars using the CPI-U from Bureau of the Census (1993c: Table A-2); all percentages were calculated relative to the constant 1992 dollar value of $14,228 for the official two- adult/two-child poverty threshold (Bureau of the Census, 1993c: Table A). a Year contained the low point of a recession as determined by the National Bureau of Economic Research (see Bureau of the Census, 1993b:B-1). average get-along amount in that survey. Because the two questions were administered to the same respondents in 1992 (instead of to different samples as in 1989), the lower ratio in 1992 may stem from the influence of respondents' get-along answers, elicited first, on their poverty answers. Most recently, in 1993, also at our request, the General Social Survey administered the poverty question (but not the get-along question).36 Table 2-4 includes the 36 The General Social Survey also included the poverty question for a family of three and a question on the minimum amount needed specifically for food. The Wisconsin Survey (a national telephone survey) also included both the get-along and the poverty questions in 1992 to the same respondents. The Wisconsin data are not strictly comparable, however, as the questions pertained to monthly rather than weekly amounts. Also, the sample size was very small—only 528 responses.

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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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