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An
Experimental Measure of Poverty
Poverty thresholds were first developed in 1963 by Mollie Orshansky
of the U.S. Social Security Administration. In 1969, a Federal
Interagency Committee refined her measure and introduced the official
measure of poverty that is still used today. This poverty measure has
been criticized on a number of grounds, and in 1995, a National
Academy of Sciences panel published a report that contained a series
of recommendations to improve the measure:
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Use an after-tax income measure.
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Add the value of in-kind benefits, such as food stamps, to
income.
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Subtract work-related, child-care and medical out-of-pocket
expenses from income.
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Poverty thresholds should represent a dollar amount for food,
clothing, and shelter.
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Improve estimation of geographic cost-of-living differences.
The Census Bureau has developed an experimental measure of poverty
that incorporates these recommendations. Under the revised measure,
there were 39.6 million persons below poverty in 1998, about 14.6
percent of the population. In contrast, the official poverty measure
yields an estimate of 34.5 million persons in poverty, or 12.7 percent
of the population. The Census Bureau has developed a variety of
experimental poverty measures based on different assumptions about
in-kind benefits, geographic variations in income, and child care
expenditures. For more information, visit the Census
Bureau Web site.  |
