National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

Chapter: The Basic Bundle and Multiplier Together

« Previous: The Multiplier
Suggested Citation:"The Basic Bundle and Multiplier Together." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
Page 152

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

POVERTY THRESHOLDS 152 child families at or below the median level of expenditures on the basic bundle varied from 1.14 to 1.22 for the first definition and from 1.17 to 1.26 for the second definition (see Table 2-6). We concluded that a reasonable range for the multiplier to apply to the food, clothing, and shelter component of the reference family poverty threshold is 1.15 to 1.25. If the amount for food, clothing, and shelter is $11,950-$12,720 per year (in 1992 dollars), then a multiplier in the range of 1.15-1.25 will provide an added $1,790-$3,180 per year, or about $150- $265 per month, for all other consumption.46 For comparison, the implicit multipliers on food, clothing, and shelter in some expert poverty budgets for two-adult/two-child families (after excluding those expenditures that we propose to deduct from resources) range from 1.14 to 1.30: • 1.14, covering personal care, household supplies, and non-work-related transportation (Renwick, 1993a); • 1.29, covering personal care, household furnishings and operations, non- work-related transportation, reading, recreation, alcohol, tobacco, education, and miscellaneous (Bureau of Labor Statistics, 1982: Table 1);47 and • 1.30, covering personal care, household supplies, non-work-related transportation, and such incidentals as newspapers, stamps, stationery (Schwarz and Volgy, 1992). The Basic Bundle and Multiplier Together On the basis of our review of CEX data, we concluded that a reasonable range for the initial poverty threshold for a two-adult/two-child family is $13,700 to $15,900 (in 1992 dollars). The lower end of this range is the value of the 30th percentile of expenditures on food, clothing, and shelter (or 78% of the median) times 1.15; the upper end of the range is the value of the 35th percentile of expenditures on food, clothing, and shelter (or 83% of the median) times 1.25 (both rounded to the nearest $100). Of course, it would be possible to obtain an initial reference family threshold within the same range with a higher (lower) value for food, clothing, and shelter and a lower (higher) value of the multiplier. We cannot claim scientific backing for the ranges of values that we conclude are reasonable for these two parameters, or for the range for the initial poverty threshold itself. We can point to the reasonableness of the ranges we suggest both in terms of prepared for us by the Energy Information Administration, based on automobile and truck usage only, suggests that the allocation might be one-third work and two-thirds nonwork uses (letter from Lynda T. Carlson to the panel, 1994). 46 The amount for the 1.15 multiplier in Chapter 1 is shown as $1,750 instead of $1,790 per year because that is the amount when the lower end of the suggested range is rounded down to the nearest $100. 47 This estimate of the multiplier is for the BLS lower level budget, which was about two- thirds of the intermediate budget and not intended to represent a poverty level.

Next: Comparison with Other Thresholds »
Measuring Poverty: A New Approach Get This Book
Buy Paperback | $75.00 Buy Ebook | $59.99
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

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.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook,'s online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  6. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  7. ×

    View our suggested citation for this chapter.

    « Back Next »
  8. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!