Is Poverty a Myth? The Measurement of Poverty

Trends in Official Poverty Rates

Defining Poverty Orshansky thresholds Controversies –Inflation adjustment –Food cost –Equivalence scales

Trend in Poverty Under Alternative Definitions

The NRC Recommendations Poverty thresholds should represent a budget for food, clothing, shelter, and a small additional amount. Threshold should be based on actual consumption data Cost of living adjustments by region Define family resources as sum of money income plus near money benefits Equivalence scales based (A+PK) F with P and F =.70 (approx)

Consumption Based Index Measures resources by household expenditures rather than money income Uses econometric analysis to define equivalence scales Resulting scales are suspect

Jorgenson-Slesnick Equivalence Scales 4-person household headed by yr old requires 1.53 times the expenditure than if headed by year old Female headed household needs 62% of what a male-headed household with otherwise identical measured characteristics Southern household would require 1.53 times the expenditure of one of the western states.