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Final Report of the Interagency Technical Working Group on Evaluating Alternative Measures of Poverty

In early 2019, the Chief Statistician of the United States (Chief Statistician) formed the Interagency Technical Working Group on Evaluating Alternative Measures of Poverty (Working Group) to evaluate possible alternative measures of poverty, how such measures might be constructed, and whether to publish those measures along with the official poverty measure and the supplemental poverty measure.

The Working Group primarily focused on unidimensional as opposed to multidimensional poverty measurement. Unidimensional poverty measures have two key parts: the resource measure and the thresholds. The resource measures recommended by the Working Group include an extended income measure and a consumption measure. No specific threshold was recommended, but the Working Group recommended future expert input and research on thresholds. In addition, included in the report are recommendations calling for future research on other measures, including individual indicators of well-being, multidimensional poverty measures, and timely poverty measurement.

Most relevant for the BLS are the recommendations associated with the production of a consumption-based resource measure. Such a measure would be created using expenditure and related data from the Consumer Expenditure Surveys (CE). For the majority of goods and services, expenditures are a good proxy for consumption (e.g., food purchased for home consumption and food away from home). However, for others like those spent for owner-occupied housing and vehicles, expenditures do not reflect consumption; for these, the value of service flows would need to be imputed for inclusion in a measure of consumption.

The final report of the Working Group also considers implementation issues. For example, if consumption measures of poverty are to be produced at the state-level, the sample design of the CE would need to change.

The Federal Register Notice and the Working Group's Interim Report are available online at: https://www.regulations.gov/docket?D=OMB-2019-0007. The final report, published on January 14, 2021, is available here: https://www.bls.gov/cex/itwg-report.pdf.

 

Last Modified Date: January 25, 2021