Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Study shows official measures of American poverty off-base

09.08.2012
For more than 45 years, the poor in this country have been identified by the U.S. Census Bureau's Official Poverty Measure — a tool that determines America's poverty rate based on pretax money income, which does not reflect all the resources at a family's disposal.
That method of calculating who is poor and who is not has been under fire by researchers for years because it doesn't calculate the benefits of anti-poverty programs — such as food stamps and housing subsidies — into its formula. In response to the criticism, the Census Bureau released in fall 2011 the Supplemental Poverty Measure to more accurately assess poverty in America. A culmination of more than three decades of research on poverty measurement, the supplemental measure is used as a complement, not a replacement, for the Official Poverty Measure.

Though the new supplemental measure uses a definition of income that is conceptually closer to resources available for consumption than pretax money income, a new study by University of Notre Dame Economist James X. Sullivan finds that even the Supplementary Poverty Measure provides an inaccurate reflection of deprivation in this country. Sullivan argues that looking at what people consume — the housing, food and other goods they are able to enjoy — provides a more accurate indicator of who is struggling to make ends meet.

"We find that the Supplementary Poverty Measure adds to the ranks as 'poor' people those who have higher consumption levels and are more likely to be college graduates, to own a home and a car, to live in a larger housing unit, and to have other more favorable characteristics than those who are dropped from the definition of poverty," says Sullivan, whose research examines the consumption, saving and borrowing behavior of poor households in the U.S., and how welfare and tax policy affect the well-being of the poor.

The new study is published in the latest issue of the Journal of Economic Perspectives. Sullivan's co-author is Bruce Meyer of the University of Chicago.

An accurate measure of poverty is critically important — the poverty rate is often cited by policymakers, researchers and advocates who are evaluating social programs that account for more than a half trillion dollars in government spending.

Both the official poverty measure and the Supplemental Poverty Measure use income as the basis for determining poverty, which does not capture differences over time or across households in wealth accumulation, ownership of durable goods such as houses and cars, or access to credit.

"Our research shows that consumption appears to be a better predictor of deprivation than income; in particular, material hardship and other adverse family outcomes are more severe for those with low consumption than for those with low income. Consumption also appears to be more accurately reported than income for the most disadvantaged families."

James Sullivan | EurekAlert!
Further information:
http://www.nd.edu

More articles from Business and Finance:

nachricht How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung

nachricht Demographic change depresses tax revenues
04.11.2016 | Fraunhofer-Institut für Angewandte Informationstechnik FIT

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Quantum optical sensor for the first time tested in space – with a laser system from Berlin

For the first time ever, a cloud of ultra-cold atoms has been successfully created in space on board of a sounding rocket. The MAIUS mission demonstrates that quantum optical sensors can be operated even in harsh environments like space – a prerequi-site for finding answers to the most challenging questions of fundamental physics and an important innovation driver for everyday applications.

According to Albert Einstein's Equivalence Principle, all bodies are accelerated at the same rate by the Earth's gravity, regardless of their properties. This...

Im Focus: Traffic jam in empty space

New success for Konstanz physicists in studying the quantum vacuum

An important step towards a completely new experimental access to quantum physics has been made at University of Konstanz. The team of scientists headed by...

Im Focus: How gut bacteria can make us ill

HZI researchers decipher infection mechanisms of Yersinia and immune responses of the host

Yersiniae cause severe intestinal infections. Studies using Yersinia pseudotuberculosis as a model organism aim to elucidate the infection mechanisms of these...

Im Focus: Interfacial Superconductivity: Magnetic and superconducting order revealed simultaneously

Researchers from the University of Hamburg in Germany, in collaboration with colleagues from the University of Aarhus in Denmark, have synthesized a new superconducting material by growing a few layers of an antiferromagnetic transition-metal chalcogenide on a bismuth-based topological insulator, both being non-superconducting materials.

While superconductivity and magnetism are generally believed to be mutually exclusive, surprisingly, in this new material, superconducting correlations...

Im Focus: Studying fundamental particles in materials

Laser-driving of semimetals allows creating novel quasiparticle states within condensed matter systems and switching between different states on ultrafast time scales

Studying properties of fundamental particles in condensed matter systems is a promising approach to quantum field theory. Quasiparticles offer the opportunity...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Sustainable Water use in Agriculture in Eastern Europe and Central Asia

19.01.2017 | Event News

12V, 48V, high-voltage – trends in E/E automotive architecture

10.01.2017 | Event News

2nd Conference on Non-Textual Information on 10 and 11 May 2017 in Hannover

09.01.2017 | Event News

 
Latest News

Tracking movement of immune cells identifies key first steps in inflammatory arthritis

23.01.2017 | Health and Medicine

Electrocatalysis can advance green transition

23.01.2017 | Physics and Astronomy

New technology for mass-production of complex molded composite components

23.01.2017 | Process Engineering

VideoLinks
B2B-VideoLinks
More VideoLinks >>>