Measuring Poverty A New Approach (1995) / Chapter Skim
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6 OTHER ISSUES IN MEASURING POVERTY
6 OTHER ISSUES IN MEASURING POVERTY
Pages 293-316
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From page 293... ...
Recommendation There are several arguments for retaining the annual accounting period, and overall, we find them persuasive. First, not doing so would interrupt the time series of annual poverty rates extending back to the 1960s.
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From page 294... ...
For this purpose, the length of the measurement period may matter less than whether different time periods result in different trends over time or different poverty rates for key groups, such as the elderly and children. An annual measure is arguably as appropriate as any other for this important purpose.
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From page 295... ...
To supplement the annual statistics, we support initiatives to develop and publish shorter tea measures of poverty that can facilitate evaluation of such programs as AFDC and food stamps. Because of the eligibility rules of these programs specifically, their requirement that families use up most assets before applying for benefits it will probably be necessary to include asset values in the family resource definition for poverty measures that use an accounting period of less than a year.
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From page 296... ...
found evidence for the idea that a short-term poverty measure would be more suitable than an annual measure for evaluating assistance programs that use a short accounting period. Thus, 90 percent of recipients of AFDC and food stamps were in poverty at least l month, even though only 64-70 percent of recipients were in poverty on an annual basis.
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From page 297... ...
found that such assistance programs as AFDC and SSI are targeted to those in crisis and not to income-poor people with financial assets. SIPP makes possible the regular derivation and publication of short-term poverty measures, including measures that take account of families' asset hold 4 Monthly poverty rates are averages over 12 months; 4-month rates are averages over three 4-month periods.
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From page 298... ...
and Duncan, Smeeding, and Rodgers (1992) argue strongly for the calculation of a long-term measure of poverty in addition to short-term and annual poverty measures.
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From page 299... ...
The single-year poor were more likely than nonpoor people to be black, poorly educated, and living in female single-parent families; the persistently poor were even more likely to have these characteristics.7 6 To permit comparison of PSID data with the decennial census, Adams and Duncan (1988) defined "urban" areas to be central counties of metropolitan areas that contained a population of one million or more people.
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From page 300... ...
In general, these spell-based measures do not address the phenomenon of multiple spells and hence, as Ashworth, Hill, and Walker (1992) note, are not able to address distributional questions because the unit of analysis is the spell rather than the person or family unity A second measure considers the proportion of workers or families whose incomes fall below the poverty threshold in x out of y time periods.
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From page 301... ...
. Longer term poverty measures are almost always proposed as a supplement to annual or shorter term measures.
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From page 302... ...
, but we find no compelling evidence at this time to move away from the family concept. Hence, we recommend continuing that practice with one important modification: families should be defined to include cohabiting couples.~° Such couples typically pool resources, and many of them exhibit considerable stability, so that it seems to make sense to treat them like married-couple families for purposes of poverty measurement.
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From page 303... ...
For purposes of poverty measurement, as noted earlier, the definition of "family" includes every unrelated person, whether living alone, with roommates or partners, or with but not related to a family. Hence, the use of a household definition would result in a smaller number of larger units: for example, two or more roommates living together would be counted as one household rather than as two or more single-person families.
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From page 304... ...
We know of no perfect solution to this dilemma. In reality, there is some, but incomplete, pooling of household or family income and joint consumption, and so a choice must be made in the unit of analysis for measuring poverty.
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From page 305... ...
It is cohabitation, a form of living together in a marriage-like relationship with an expectation of some longevity but not recorded by a marriage license. By the definitions of the Census Bureau, couples living in cohabitational units are 13 Whichever definition is used for poverty measurement family or household-poverty statistics would also include unrelated individuals living alone in their own households.
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From page 306... ...
Research on resource sharing (whether intrafamilial or among unrelated individuals in households) should include an assessment of the likely magnitude of the effects on poverty rates of changing the unit of analysis (e.g., defining roommates as well as cohabiting couples as "families" or completely replacing the family definition with a household definition)
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From page 307... ...
The CNSTAT SIPP panel observed that another argument for using people as the unit of presentation relates to statistics that are developed on the basis of longitudinal data, such as the monthly demographic and income information in SIPP. The panel recommended that annual poverty rates from ~5 Care must be taken in using CPS reports to be sure one understands the unit of presentation in a particular table.
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From page 308... ...
In view of these and other problems, the CNSTAT SIPP panel recommended that the Census Bureau continue the practice of developing person-based longitudinal income, poverty, and program statistics for SIPP reports, with attribution of household, family, and program unit characteristics to people. In the case of annual statistics from the March CPS and SIPP that are designed for comparison purposes, that panel recommended that the tables from both sources should use attribute-based person measures.
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From page 309... ...
The count and other statistics should also be published for poverty measures in which family resources are defined net of government taxes and transfers, such as a measure that defines income in beforetax terms, a measure that excludes means-tested government benefits from income, and a measure that excludes all government benefits from income. Such measures can help assess the effects of government taxes and transfers on poverty.
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From page 310... ...
, among others, have pron~c~cl ~ lint ~fcn~rifir nron~rti~c hv which one might evaluate the appropnate r-V-~ ~ ^^- -- or -- no - r~ or ~~ ~ ness of any proposed poverty index. One such property is monotonicity: that is, the index should decrease for an income increase of a poor person even if that increase does not move the person across the poverty line (as well as, of
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From page 311... ...
The "poverty gap" has this property, as it is a calculation of the difference between the income of the poor and their poverty thresholds. A variety of poverty indexes have been proposed that integrate different combinations of the properties suggested for a good index.
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From page 312... ...
Also, it is important to caution about drawing unwarranted conclusions from particular indexes for example, the poverty gap is not a measure of the amount of money that the government would have to spend to eliminate poverty (see Chapter 8, on behavioral responses to government 17 We note that Orshansky (1965a:14) , in her original work on the poverty measure, provided exactly this type of information, namely, average income of the poor for groups and average income of the poor for the total population, compared with an average weighted poverty threshold.
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From page 313... ...
Nonetheless, such indicators can enrich understanding of the nature and scope of economic poverty in the United States and how it changes over time. Indexes with Alternative Resource Definitions The Census Bureau currently publishes indexes for "experimental" measures of poverty that use alternative definitions of family resources.
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From page 314... ...
. Hence, properly speaking, poverty rates calculated under alternative resource definitions assess the implications of an instantaneous change in government programs before there is time for people to adjust their behavior.
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From page 315... ...
Children's physical health indicators, such as low birthweight, failure to thrive, and chronic illnesses, also have been shown to be related to measured poverty (Adler et al., 1994; Brooks-Gunn, 1990; Egbuonu and Starfield, 1982; Eisen et al., 1980; Klerman, 1991; McCormick et al., 1991; Parker, Greer, and Zuckerman, 1988; Stein et al., 1987~. Moderate to severe behavior problems in children are also linked statistically to economic poverty (see, e.g., Cutter, 1989~.
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From page 316... ...
They typically cannot alter their poverty status by themselves, at least until they approach late adolescence, so it is fitting to focus special attention on them in any study of poverty. Third, and last, this volume does not address the broad and well-researched topics of the causes of economic poverty or issues in the development of policies to reduce its prevalence or its adverse effects.
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