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June 2006

Misclassification in an experimental poverty measure

Richard Bavier

A test of poverty misclassification using data from the Consumer Expenditure Survey (CE) does not support the National Research Council's contention that medical needs must be treated differently from other needs in the measurement of poverty. This article derives an estimate, using CE data, as to how much misclassification would result from including something for medical needs in the poverty thresholds. Expenditures, rather than income, are used as the measure of economic resources in order to perform the misclassification tests.

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