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Experimental Poverty Measures: Summary of a Workshop
from the scientific community on which components of alternative measures are methodologically sound and which might need further refinement, toward the goal of narrowing the number of alternative measures that should be considered.
For the workshop, the planning group asked several researchers to prepare papers as the basis for discussions. The paper authors were charged to summarize the work that had been conducted on a particular element of alternative poverty measures, discuss the technical issues that have arisen, and outline the strengths and limitations to alternative approaches. Designated workshop discussants were asked to give their assessments of whether different alternative measures were sound enough methodologically as an improvement over the current measure. During the open discussion in each session, all workshop participants were encouraged to comment on whether each alternative measure was sound enough methodologically to be considered an improved alternative measure over the current measure of poverty.
At the outset of the workshop, the planning group explained that three changes to the current poverty measure that were recommended in the 1995 report have such broad support they were not included in the charges to the paper authors nor specifically slated for discussion at the workshop. Those changes involve the family resources part of the measure, currently defined as gross cash income:
Subtract income taxes and payroll taxes and add the Earned Income Tax Credit (EITC) and realized capital gains or losses.
Add the value of food stamps and other near cash benefits, which include school lunch benefits, energy subsidies, and, if the data are available, the value of benefits received under the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and the school breakfast program.
Subtract child support payments made by the payer, if the data are available.
THE CURRENT OFFICIAL POVERTY MEASURE
The current official poverty measure has two components—poverty thresholds and the definition of family resources that are compared to these thresholds. Mollie Orshansky, a staff economist at the Social Security Administration, developed poverty thresholds in 1963 and 1964 by using the “Economy Food Plan” (the lowest cost food plan) prepared and priced by