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Office of Survey Methods Research
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Published Year: 2005
Survey/Program(s): Consumer Expenditure Survey (CE)
Catalog: Statistical Survey Paper
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Developing Poverty Thresholds
Abstract
In 1995, the National Academy of Sciences (NAS) Panel on Poverty and Family Assistance proposed specific recommendations for the production of new poverty thresholds for the US. These include the use of consumer expenditure survey data to obtain median expenditures for food, clothing, shelter, and utilities, with a multiplier for additional necessary items. This paper addresses the issue of needs versus spending, threshold estimation and associated assumptions, and operational issues regarding the production of such thresholds on a regular basis for official publication as opposed to their production as an experimental research activity. Research regarding estimation of the thresholds, conducted primarily within the Bureau of Statistics and in conjunction with the Bureau of the Census, is reviewed along with challenges for the future. Among those challenges are the selection of the time period for which the underlying data refer, the selection of commodities to include (for example, medical care), and the valuation of owner-occupied and subsidized housing.