Alternative Poverty Estimates: 2003

Poverty estimates based on alternative measures of income

Poverty estimates based on National Academy of Sciences recommendations

Based on the same poverty thresholds (dollar amounts used to determine poverty status) as the official measure, but different definitions of income.

Based on poverty thresholds and income definitions that both differ from the official poverty measure.

Thresholds vary by size of family and ages of family members.  Originally computed using USDA food budget data and estimated portions of family income spent on food.  Updated for inflation using the Consumer Price Index (official measure and some alternatives use the CPI-U, other alternatives use the CPI-U-RS, a revised price index). (More about CPI-U and CPI-U-RS)

Thresholds are adjusted for family size and composition differently from the official measure--these thresholds are based on food, clothing, shelter, utilities, a small amount for miscellaneous expenses, and for some measures, average medical expenses paid out-of-pocket.

Income definitions vary:

Income is based on:

• Some alternative measures use after-tax income

• After tax income

• Others include the value of noncash benefits (such as food stamps, Medicaid, and Medicare) as income

• Includes value of noncash benefits

• 17 definitions of income vary according to the combinations of taxes and noncash benefits taken into account

• Deducts some work-related expenses                                                                                

• Official measure uses money income only

• Takes medical expenses into account  (each measure uses a different method for doing so)