Full Citation
Title: Comments on the U.S. Census Bureau and Interagency Technical Working Group Supplemental Poverty Measure
Citation Type: Miscellaneous
Publication Year: 2011
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Abstract: Longstanding government measures of poverty are based on income thresholds that are uniform across locations. The newly developed supplemental poverty measure (SPM) departs from that tradition by setting higher income thresholds in metropolitan and rural areas with higher housing costs. This allows for inter-metropolitan differences in housing prices that affect the level of income necessary for a family to purchase a minimum level of food, clothing, shelter, and other essential items necessary to attain a minimum standard of living. Numerous government programs that provide assistance to the poor define eligibility in part based on a family’s designated poverty status. Although the SPM is not being used for such purposes, the possibility exists that it may be used in this fashion at some point in the future. In that regard, the SPM has potential to affect not only perceptions of regional differences in poverty, but also the geographic distribution of benefits from federal and state government programs that provide assistance to the poor. Central to the new SPM measure of poverty is the idea that the level of income that defines a given size family’s poverty status should be higher in metropolitan (and non-metropolitan) areas with high housing costs. For these purposes, housing costs are defined so as to include expenditures on utilities including electricity, heating, etc.. This is presumably motivated by recognition that the need for heating/cooling as well as energy prices differ widely across geographic areas as between Houston versus Detroit, for example. The new poverty measure also measures housing costs differently for renters, owner-occupiers with a mortgage, and owner-occupiers without a mortgage. This feature of the SPM is motivated by observable differences in the annual out-of-pocket costs of housing that vary with each of the three housing tenures just noted. Calculation of the SPM, at least in its current form (e.g. Renwick (2011)), is based on either mean or median housing costs for individual identified locations. My comments below are organized into three subsections. I will first offer some perspectives intended to critique the SPM. This is followed by one suggestion for an alternative feasible method of calculating the SPM (to use hedonic-based measures of quality adjusted housing costs). Suggestions for further research on geographic adjustment of poverty thresholds are provided in the final section, as are recommendations for the SPM going forward.
Url: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.422.3988&rep=rep1&type=pdf
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Authors: Rosenthal, Stuart, S
Publisher: Syracuse University
Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure, Poverty and Welfare
Countries: United States