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Disclaimer: Not all the authors of the research papers and conference
presentations are affiliated with BLS. This information is provided for
your convenience and does not necessarily reflect the views or policies of
BLS.
Research Experimental Poverty Thresholds
Overview
Since 1995, the Bureau of Labor Statistics (BLS) has been conducting
research on the development of experimental expenditure-based poverty
thresholds known as the National Academy of Science (NAS) Thresholds. The
early work was based on recommendations of the 1995 NAS report
Measuring Poverty: A New Approach, (Citro and Michael 1995). More
recently, the Interagency Technical Working Group (ITWG) provided a
framework for a second set of poverty thresholds as part of the
Supplemental Poverty Measure (SPM). The ITWG's recommendations are
outlined in the document "Observations from the Interagency Technical
Working Group on Developing a Supplemental Poverty Measure" (PDF).
A guiding principle for the development of the SPM is that resources and
thresholds be consistently defined.
Both the NAS and ITWG documents refer to the U.S. Consumer Expenditure
Survey (CE) as the basis for these expenditure-based poverty thresholds.
The documents also note that BLS is responsible for conducting research on
expenditure-based poverty thresholds, and for providing these thresholds
to the U.S. Census Bureau for use in producing research experimental
poverty statistics. The ITWG acknowledged that the BLS had produced the
NAS thresholds in the past and expected that the BLS would continue to
play this role for the SPM.
Within the BLS, the Division of Price and Index Number Research (DPINR)
conducts all expenditure-based poverty threshold research. Support
regarding the CE data is provided, as needed, by staff within the Division
of Consumer Expenditure Surveys. DPINR research is conducted in
consultation and cooperation with U.S. Census Bureau researchers.
The BLS-DPINR Research Experimental poverty thresholds are presented
with a caveat: what appears on this BLS web page does not reflect the
rigors of production quality thresholds or related statistics. For such
thresholds to be produced, a broader BLS endeavor would need to be created
that coordinates the development of improvements in, and the production
and dissemination of, expenditure-based SPM thresholds. This effort would
include support for: research economists to devise and test suggested
improvements in the thresholds and share this research with the economics
and statistics profession at large, as well as the general public; IT
staff to design, code, test, and provide diagnostic statistics;
statistical methods staff to develop measures of data and statistical
quality; and economists to analyze the data, produce the thresholds and
related statistics, and disseminate the thresholds to the public. As part
of this effort, improvements in the CE Survey would need to be introduced
to better capture information to meet the needs of the SPM such as those
related to the receipt of in-kind benefits. Each year since FY 2011, a
request for funds to support a SPM initiative to create such a program at
BLS and to produce production quality SPM thresholds has been included in
the President's proposed budget. However, this initiative has yet to be
funded.
On this web page, recently produced Research Experimental
expenditure-based poverty thresholds are presented along with papers and
presentations related to these. Much of the research was conducted by BLS
in cooperation with U.S. Census Bureau staff and other academic
researchers. Again, as noted above, the thresholds developed and described
in the research papers and conference presentations are not produced using
standard BLS production procedures.
This BLS website hosts the Research Experimental SPM thresholds (see
below), while the U.S. Census Bureau website hosts the official measure
(
http://www.census.gov/topics/income-poverty/poverty.html ) and
Research Experimental NAS poverty thresholds (
http://www.census.gov/hhes/povmeas/data/nas/index.html ). On September
13, 2016, the Bureau of the Census releases the 2015 official poverty
statistics, and the SPM statistics based on the BLS-DPINR thresholds.
Background
The official poverty measure of the United States was first developed
in the early 1960s and adopted as "official" in 1969. The official poverty
threshold was determined to be the dollar value of a minimally adequate
diet times three. The multiplier of three was used because 1955 Food
Consumption Survey data showed that food expenditures accounted for
one-third of after-tax income for the average family with children. An
annual threshold of about $3,100 for a family with two adults and two
children was set as the standard of needs for 1963, and has been fixed in
inflation-adjusted terms since then. The U.S. Census Bureau is responsible
for publishing official annual poverty thresholds, rates, and other
statistics.
The NAS recommendations provide the framework for a definition of the
SPM. However, research over the years has suggested modifications to the
NAS recommendations; the modifications are discussed in detail in the ITWG
document. The SPM is not intended to replace the official poverty measure
but is to be considered a work in progress, with the expectation that
there will be improvements to it over time. Changes in the SPM are to be
decided upon in a process led by research economists, survey
methodologists, and statisticians within the U.S. Census Bureau in
consultation with BLS and with other appropriate data agencies and outside
experts, and will be based on solid analytical evidence.
BLS-DPINR Research Experimental Supplemental Poverty
Measure (SPM) Thresholds
Research Experimental SPM thresholds are based on consumer
unit out-of-pocket expenditures for food, clothing, shelter and
utilities (FCSU), and a multiplier to account for other basic goods and
services, like those for household supplies, personal care, and non-work
related transportation. The Census Bureau compares resources to thresholds
to assess whether consumer units can meet their needs as defined by the
SPM thresholds. If a consumer unit is unable to meet these needs, it is
considered poor. Currently the SPM resource measure counts not only money
income that can be used to meet out-of-0ocket FCSU expenditures, but also
the value of in-kind benefits to meet FCSU needs through the use of these
benefits. In-kind benefits added to net income by the Census Bureau
include benefits from: Low Income Housing Energy Assistance Program
(LIHEAP), National School Lunch Program (NSLP), Supplemental Nutrition
Assistance Program (SNAP), Women, Infants, and Children Program (SIC), and
rental assistance from government sources. SNAP benefit values are
implicitly included in food expenditures in calculating the SPM
thresholds; however, in-kind benefits from the other programs are not
considered. This is because the Consumer Expenditure Interview Survey
collects limited to no information on the receipt of these additional
benefits. Current research is ongoing to develop approaches to account for
these in-kind benefits in the SPM thresholds. Once these benefits are
accounted for in the SPM thresholds, consistency in the thresholds and
resources will be achieved.
For each threshold year, five years of quarterly U.S. Consumer
Expenditure Interview Survey data are used. Expenditures are updated to
annual threshold year dollars using the Consumer
Price Index for All Urban Consumers (CPI-U).
Research Experimental SPM thresholds are based on a range of FCSU
expenditures centered on the 33rd percentile for the estimation sample of
consumer units (CUs). The NAS-based thresholds were based on percentages
of the median of FCSU expenditures. Also, unlike the earlier NAS-based
thresholds that were based on spending by families with two adults and two
children, the SPM estimation sample is composed of CUs with two children
and any number of adults. Equivalence scales are used to convert the
estimation sample FCSU expenditures to those of reference consumer units
composed of two adults and two children.
A three-parameter equivalence scale, proposed by Betson (1996), is used
to adjust FCSU expenditure for each consumer unit in the estimation
sample. The parameters allow for differing needs of adults and children
and for economies of scale for consumption within the consumer unit. A
distinguishing feature of the three-parameter equivalence scale is the
adjustment for single parents; no adjustment for single parents was
included in the two-parameter scale proposed by the NAS Panel. The
three-parameter equivalence scale has been used in the productions of the
NAS and SPM thresholds in the past (e.g., Garner 2010). Directly below, we
present the three-parameter equivalence scale that we apply to the
estimation sample for the production of the Research Experimental SPM
thresholds:
Single adults with children scale = (1 + a +
ß(K-1))f
Multiple adults with children scale = (A +
ßK)f
where
a = parameter to account for the needs of the first child,
ß = parameter to account for the needs of additional
children,
f = parameter to account for economies of scale within the
consumer unit,
A = number of adults within the consumer unit, and
K = number of children within the consumer unit
The parameters a, ß, and f were estimated by
Betson to fit the cost of children literature, and when rounded, were
selected to be 0.8, 0.5, and 0.7, respectively.
Separate Research Experimental SPM thresholds are produced for owners
with mortgages, owners without mortgages, and renters. The Research
Experimental SPM housing tenure thresholds are produced using the equation
below.
SPM Thresholdh = 1.2 * FCSU
E - (S + U) E + (S + U) h
1.2 = multiplier used to account for expenditures
for other basic goods and services, like those for household supplies,
personal care, and non-work related
transportation.
FCSU, S, and U refer to the means
of the sum of expenditures for food, clothing, shelter and utilities,
and the shelter and utilities portions of FCSU, respectively, for the
estimation of sample CUs within the 30th to 36th
percentile range of FCSU expenditures.
E refers to the entire estimation sample, within
the 30th to 36th percentile range of FCSU
expenditures, with FCSU expenditures converted to those for consumer
units with two adults and two children without distinction by housing
tenure.
h refers to one of three housing tenure
groups:
Owners with mortgages Owners without
mortgages, or Renters.
To test for a significant change in the threshold from the previous
year, or to make a comparison between thresholds within a year, one would
conduct a Z-test. The test statistics are specified below, for each type
of comparison. First, to test for the statistical difference in a
threshold from year to year (e.g., SPM renter thresholds), simply divide
the change in the current threshold (t) from the previous year (t-1) by
the standard error of the year-to-year difference.
Z Renters , t , t-1 = (SPM Renters
, t - SPM Renters , t-1 ) / Standard error
Renters , t, t-1
For a statistical comparison of thresholds within year t (e.g., renter
thresholds compared to owner without mortgage thresholds), simply divide
the difference in the two thresholds within the year by the standard error
of the difference between the two housing tenure groups that is listed for
the current threshold year.
Z Renters compared to Owners without mortgages , t
=
(SPM Renters , t - SPM Owner without
mortgages , t ) / Standard error Renters compared to Owners
without mortgages , t
Research Experimental SPM thresholds for 2009-2010 were first posted to
the BLS website in table format in November 2011. Thresholds for 2005-2008
were added shortly thereafter. Ever since, the time series has been
supplemented by an additional year's threshold each September. SPM
thresholds generally are released by the BLS after the CE data are
released to the public.
These Research Experimental SPM thresholds and associated standard
errors can be found through the links below. Also available are the
expenditure shares of each of the components of the thresholds.
The weighted share distribution of consumer units by housing tenure for
the SPM thresholds for each year is included in the "BLS-DPINR Research
Experimental SPM Thresholds with Housing Tenure Shares" file. This is
included to facilitate the calculation of a weighted average of the three
SPM thresholds for users who are interested in a base FCSU threshold.
Likewise, a weighted average of a particular component of the SPM
thresholds (i.e., Food, Clothing, Shelter, Utilities) can be computed
using the housing tenure distributional weights along with the housing
tenure specific component from the "Expenditure Shares" file below. For
example, a weighted average of Shelter across the three housing tenure
groups would be calculated as follows:
S W = (P Owners with mortgages
* S Owners with mortgages * SPM Owners with
mortgages)
+(P Owners without mortgages * S Owners
without mortgages * SPM Owners without
mortgages)
+(P Renters * S Renters * SPM
Renters)
where
S W = weighted average of shelter share in
SPM threshold
P = weighted share distribution of consumer units by
housing tenure
S = shelter component share of SPM threshold for housing
group
SPM = SPM threshold for housing
group
Please note that use of all of the significant digits presented in the
spreadsheets are necessary for inclusion in calculations; precision will
affect the resulting dollar value.
- BLS-DPINR Research Experimental SPM Thresholds with Housing
Tenure Shares (XLSX)
- Standard Errors (XLSX)
- Expenditure Shares (XLSX)
Research papers
- Supplemental Poverty Measure Thresholds and Noncash
Benefits (PDF)
The Supplemental Poverty Measure Workshop, Brookings Institution,
Washington, DC, April 26, 2016. Thesia I. Garner, Bureau of Labor
Statistics. Marisa Gudrais, Bureau of Labor Statistics. Kathleen S.
Short, Census Bureau.
- Consistency in Supplemental Poverty Measurement: Adding
Imputed In-Kind Benefits to Thresholds and Impact on Poverty Rates for
the United States (PDF)
Joint Statistical Meetings, Seattle, WA, August 9, 2015. Thesia I.
Garner, Bureau of Labor Statistics. Marisa Gudrais, Bureau of Labor
Statistics. Kathleen S. Short, Census Bureau.
- The Supplemental Poverty Measurement: Adding Imputed In-Kind
Benefits to Thresholds and Impact on Poverty Rates for the United
States (PDF)
Sixth ECINEQ Meeting, July 6, 2015. Thesia I. Garner, Bureau
of Labor Statistics. Marisa Gudrais, Bureau of Labor Statistics.
Kathleen S. Short, Census Bureau.
- The Supplemental Poverty Measure: A Joint Project between
the Census Bureau and the Bureau of Labor Statistics (PDF)
Kathleen S. Short, Census Bureau. Thesia I. Garner, Bureau of
Labor Statistics. June 8, 2012.
- Supplemental Poverty Measure Thresholds: Imputing School
Lunch and WIC Benefits to the Consumer Expenditure Survey Using Current
Population Survey (PDF)
Thesia I. Garner, Bureau of Labor Statistics. Charles
Hokayem, Census Bureau. July 2012.
- Supplemental Poverty Measure Thresholds: Imputing Noncash
Benefits to the Consumer Expenditure Survey Using Current Population
Survey-Parts I and II (PDF)
Thesia I. Garner, Bureau of Labor Statistics. Charles
Hokayem, Census Bureau. September 2011.
- The Supplemental Poverty Measure: Examining the Incidence
and Depth of Poverty in the U.S. Taking Account of Taxes and
Transfers (PDF)
Kathleen Short, Census Bureau. June 2011.
- Supplemental Poverty Measure Thresholds: Laying the
Foundation (PDF)
Thesia I. Garner, Bureau of Labor Statistics. 2010.
- Setting and Updating Modern Poverty Thresholds (PDF)
BLS Working Papers. March 2010. Thesia I. Garner, Bureau
of Labor Statistics. David Betson, University of Notre Dame.
- Housing and Poverty Thresholds: Different Potions for
Different Notions (PDF)
Thesia I. Garner, Bureau of Labor Statistics. David Betson,
University of Notre Dame. 2010.
- Note on Standard Errors and Other Relevant Statistics of
Experimental Poverty Thresholds Produced at the Bureau of Labor
Statistics: 2006 to 2008 (PDF)
BLS Working Papers. March 2010. Thesia I.
Garner, Bureau of Labor Statistics.
- Identifying the Poor: Poverty Measurement for the U.S. from
1996 to 2005 (PDF)
The Review of income and wealth,
Volume 56, Issue 2, pages 237-258, June 2010. Thesia I.
Garner, Bureau of Labor Statistics. Kathleen S. Short, Census
Bureau.
- A Note on the Movement in Median FCSU Expenditures from 2006
to 2007 (PDF)
Thesia I. Garner, Bureau of Labor Statistics. 2009.
- Reconciling User Costs and Rental Equivalence: Evidence from
the US Consumer Expenditure Survey (PDF
1.1 MB)
Thesia I. Garner and Randal Verbrugge, Bureau of
Labor Statistics. 2008.
- Creating a Consistent Poverty Measure over Time Using NAS
Procedures: 1996-2005 (PDF)
BLS Working Papers. April 2008. Thesia I.
Garner, Bureau of Labor Statistics. Kathleen S. Short, Census
Bureau.
- Comparing Approaches to Value Owner-Occupied Housing Using
U.S. Consumer Expenditure Survey Data (PDF)
Thesia I. Garner, Bureau of Labor Statistics. Uri Kogan,
Northwestern University.
- What Do We Know About the Value of Owner Occupied Housing
Services? Rental Equivalence and Other Approaches (PDF)
Thesia I. Garner, Bureau of Labor Statistics. Kathleen S.
Short, Census Bureau. Uri Kogan, Northwestern University.
- Developing a New Poverty Line for the USA: Are There Lessons
for India? (PDF)
BLS Working Papers. March 2005. Thesia I. Garner, Bureau
of Labor Statistics. Kathleen S. Short, Census Bureau.
- Personal Assessments of Minimum Income and Expenses: What Do
They Tell Us about 'Minimum Living' Thresholds and Equivalence
Scales? (PDF)
BLS Working Papers. March 2005. Thesia I. Garner, Bureau
of Labor Statistics. Kathleen S. Short, Census Bureau.
- The Role of Housing in Developing Poverty Thresholds
1993-2003 (PDF)
Thesia I. Garner, Bureau of Labor Statistics. 2005.
- Experimental poverty measures: accounting for medical
expenditures (PDF)
Monthly Labor Review, Volume 125, No. 8. August 2002.
Kathleen S. Short, Census Bureau. Thesia I. Garner, Bureau of
Labor Statistics.
- Owner-Occupied Shelter in Experimental Poverty
Measures (PDF)
Thesia I. Garner, Bureau of Labor Statistics. Kathleen S.
Short, Census Bureau. 2001.
- Report on Experimental Poverty Measures 1990 to
1997 (PDF)
Kathleen S. Short and John Iceland, Census Bureau. Richard
Bavier, Office of Management and Budget. Thesia I. Garner and
Patricia Rozaklis, Bureau of Labor Statistics. Donald J.
Hernandez, SUNY at Albany. 2001.
- Experimental poverty measure for the 1990s (PDF)
Monthly Labor Review, Volume 121, No. 3. March 1998.
Thesia I. Garner, Bureau of Labor Statistics. Kathleen S. Short,
Census Bureau. Stephanie Shipp, Bureau of Labor Statistics.
Charles Nelson, Census Bureau. Geoffrey Paulin, Bureau of Labor
Statistics.
- An experimental Consumer Price Index for the poor
(PDF)
Monthly Labor Review, Volume 119, No. 9. September 1996.
Thesia I. Garner, David S. Johnson, and Mary F. Kokoski,
Bureau of Labor Statistics.
- "Is Everything Relative?" The Role of Equivalence Scales in
Poverty Measurement (PDF)
David M. Betson, University of Notre Dame.
Conference presentations
- Supplemental Poverty Measurement (SPM) Thresholds and a
Missing Data Problem (PDF)
6th Annual BLS-Census Workshop on Empirical Research using
BLS-Census data, Washington, DC, June 6, 2016. Thesia I. Garner, Bureau
of Labor Statistics. Marisa Gudrais, Bureau of Labor
Statistics.
- SPM Thresholds: Imputing Subsidies to the Consumer
Expenditure Survey for Poverty Measurement (PDF)
Society of Government Economists Annual Conference,
Washington, DC, May 13, 2016. Thesia I. Garner, Bureau of Labor
Statistics. Marisa Gudrais, Bureau of Labor Statistics.
- Supplemental Poverty Measure Thresholds and Noncash
Benefits (PDF)
The Supplemental Poverty Measure Workshop, Brookings
Institution, Washington, DC, April 26, 2016. Thesia I. Garner, Bureau of
Labor Statistics. Marisa Gudrais, Bureau of Labor Statistics.
- Measuring Medical Expenses: MOOP in Thresholds vs. MOOP
Subtractions (PDF)
Measuring Poverty in the 21st Century Conference Stanford Center
on Poverty & Inequality, Stanford, CA, March 11, 2016. Thesia I.
Garner, Bureau of Labor Statistics.
- The Rationale for the Current Poverty Threshold (PDF)
Measuring Poverty in the 21st Century Conference Stanford
Center on Poverty & Inequality, Stanford, CA, March 11, 2016. Thesia
I. Garner, Bureau of Labor Statistics.
- Supplemental Poverty Measure Thresholds: Imputing In-Kind
Government Transfers from CPS Public Use Data to CE (PDF)
Eastern Economic Association Annual Meetings, Washington, DC,
February 26, 2016. Thesia I. Garner, Bureau of Labor Statistics. Marisa
Gudrais, Bureau of Labor Statistics. Kathleen S. Short, Census Bureau.
- The Supplemental Poverty Measurement: Adding Imputed In-Kind
Benefits to Thresholds and Impact on Poverty Rates for the United
States (PDF)
Joint Statistical Meetings, Seattle, WA, August 9,
2015.Thesia I. Garner, Bureau of Labor Statistics. Marisa Gudrais,
Bureau of Labor Statistics. Kathleen S. Short, Census Bureau.
- Supplemental Poverty Measurement Thresholds: Research
at the BLS (PDF)
APDU Annual Conference, Rosslyn, VA. Sep. 17, 2014.
Thesia I. Garner, Bureau of Labor Statistics.
- The Supplemental Poverty Measure Under Alternate Treatments
of Medical Out-of-Pocket Expenditures (PDF)
Allied Social Science Association (ASSA) Meetings,
Philadekphia, PA. Jan. 4, 2014. Thesia I. Garner and
Marisa Gudrais, Bureau of Labor Statistics. Kathleen S. Short, Census
Bureau.
- Supplemental Poverty Measure (SPM): Threshold
Issues (PDF)
Brookings/Census Bureau Meetings on
Improved Poverty Measurement, Washington, D.C. Nov. 7, 2011.
Thesia I. Garner and Marisa Gudrais, Bureau of Labor
Statistics.
- Supplemental Poverty Measure Thresholds: Laying the
Foundation (PDF)
Allied Social Science Association Annual Meetings, Denver,
CO. Jan. 8, 2011. Thesia I. Garner, Bureau of Labor
Statistics.
- Moving to a Supplemental Poverty Measure (SPM): Research on
Thresholds for 2008 (PDF)
Southern Economics Association Annual Meeting, Atlanta, GA.
Nov 10, 2010. Thesia I. Garner, Bureau of Labor
Statistics.
- Housing and Poverty Thresholds: Different Potions for
Different Notions (PDF)
Midwestern Economics Association Annual Meeting, Evanston,
IL. Mar 20, 2010. Thesia I. Garner, Bureau of Labor
Statistics. David Betson, University of Notre Dame.
- Setting and Updating Modern Poverty Thresholds (PDF)
Annual Meeting of the Allied Social Science Associations (ASSA),
Atlanta, GA. Jan 3, 2010. Thesia I. Garner, Bureau of
Labor Statistics. David Betson, University of Notre Dame.
- Poverty Threshold Alternatives/Choices (PDF
1.6 MB)
Brookings/Census Bureau Conference on Improved
Poverty Measurement. Oct 20, 2009. Thesia I. Garner,
Bureau of Labor Statistics.
- National Academy of Sciences (NAS)-Based Poverty Thresholds:
Details of Alternatives and Choices in Specification (PDF)
Joint Statistical Meetings, Washington, DC. Aug 3, 2009.
Thesia I. Garner, Bureau of Labor Statistics.
- Reconciling User Costs and Rental Equivalence: Evidence from
the US Consumer Expenditure Survey (PDF)
Annual Meeting of the Allied Social Science Associations, San
Francisco, CA. Jan 4, 2009. Thesia I. Garner and Randal
Verbrugge, Bureau of Labor Statistics.
- Accounting for Housing Services in Consumption and
Income (PDF)
ASSA-SGE Annual Meetings, New Orleans, LA. Jan 6, 2008.
Thesia I. Garner, Bureau of Labor Statistics. Sylvester Young,
International Labour Organization.
- Comparing Approaches to Value Owner-Occupied Housing Using
U.S. Consumer Expenditure Survey Data (PDF)
ASSA-SGE Annual Meetings, Chicago, IL. Jan 7, 2007.
Thesia I. Garner, Bureau of Labor Statistics. Uri Kogan,
Northwestern University.
- What Do We Know About the Value of Owner-occupied Housing
Services? Rental Equivalence and Other Approaches (PDF)
Annual Meeting of the Southern Economics Association,
Charleston, SC. Nov 18, 2006. Thesia I. Garner, Bureau of
Labor Statistics. Kathleen S. Short, Census Bureau. Uri Kogan,
Northwestern University.
- The Role of Housing in Poverty Thresholds:
1993-2003 (PDF)
Annual Meeting of the Southern Economics Association,
Washington, DC. Nov 19, 2005. Thesia I. Garner, Bureau of
Labor Statistics.
- Developing Poverty Thresholds (PDF)
JSM, Social Statistics Section, Minneapolis, MN. Aug 10,
2005. Thesia I. Garner, Bureau of Labor
Statistics.
- Incorporating the Value of Owner-Occupied Housing in Poverty
Measurement (PDF)
Thesia I. Garner, Bureau of Labor Statistics. Kathleen S.
Short, Census Bureau. 2004.
- Owner-Occupied Shelter in Experimental Poverty Measurement
with a ?Look? at Inequality and Poverty (PDF)
Southern Economics Association Conference, Tampa, FL. Nov 18,
2001. Thesia I. Garner, Bureau of Labor Statistics.
Kathleen S. Short, Census Bureau.
Last Modified Date: November 18, 2016
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