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Choices in Defining and Estimating Poverty Thresholds: Focus on the U.S. Supplemental Poverty Measure

Thesia I. Garner and Juan Munoz


This paper focuses on choices to consider when defining and estimating poverty thresholds using household expenditure survey data. The impacts of these are examined with reference to the U.S. Supplemental Poverty Measure, with reference to considerations other countries might face with similar challenges as those of the U.S. Choices outlined and discussed include the following: which goods and services to include in the thresholds and how to value these; if based on a point in a distribution, for example, at a lower point like the 33rd percentile versus the median; upon whose experience thresholds are based, e.g., households and families most likely to receive government transfers or all households in the population; the treatment of in-kind benefits; how to account for owner-occupied housing; whether and how to adjust for geographic differences in prices across areas; and the updating of thresholds over time. Thresholds based on these choices are produced.