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An Updated Measure of Poverty (Re)Drawing the Line (2023) / Chapter Skim
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Appendix 2A: Algebraic Representations of the Supplemental Poverty Measure and the Principal Poverty Measure
Pages 40-42

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From page 40...
... explicitly appear as threshold needs.1 As described in Chapter 2, while shifting aspects of the calculation from the resource side to the threshold side will raise threshold levels, adding health insurance benefits and childcare subsidies to estimates of households' resources means that, on balance, these modifications to the SPM will not necessarily change measured poverty rates.2 A family unit lives in poverty under the SPM if the value yielded by Equation 2.2 is less than that yielded by Equation 2.1; a family unit is living in poverty under the PPM if the value yielded by Equation 2.4 (a or b) is less than that yielded by Equation 2.3.
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From page 41...
... ; I is income of family i; R is government transfers; T is taxes; Work is work-related expenses; CCOOP is out-of-pocket childcare cost for family i; MOOP is all out-of-pocket spending on insurance, cost sharing, and over-the-counter medications for family i; CSi is child support paid by family i; g is geographic area; FCti is median of expenditures on the food, clothing, and telephone/internet threshold component; FMR is fair market rent applicable for household i in geographic area g; REQ/FMR is the rental equivalence for the homeowner, which initially is estimated using the appropriate FMR; Rentasst is the household's rental assistance, BHP is the basic health insurance plan; CC is childcare cost; HOOP is out-of-pocket housing costs that apply to homeowners and which is capped at the imputed rental income; For renters (REQ/FMRgj − HOOPi) = 0; PremMOOP is premium payments, which are capped at the at the BHP or Medicaid/Veterans Health Administration limit; Csub is childcare subsidy; Msub is medical subsidy (zero if unsubsidized)
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Key Terms

  • health insurance
  • family unit
  • value yielded
  • principal poverty
  • fair market

  • market rent
  • childcare cost
  • basic health
  • insurance plan
  • cost share

  • administration limit
  • medical services
  • medicaid limit
  • raise threshold
  • government transfers

  • housing variable
  • percentile range
  • change measured
  • including childcare
  • health administration

  • childcare subsidy
  • imputed rental
  • equivalence scales
  • necessarily change
  • appropriate fmr

  • threshold component
  • medical subsidy
  • rent applicable
  • resources means
  • geographic adjustment


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