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Bureau of Labor Statistics > Price and Index Number Research > Price research data > Research Poverty Thresholds

Supplemental Poverty Measure Thresholds Changes

Overview

On September 30, 2020, the Interagency Technical Working Group on the Supplemental Poverty Measure (ITWG SPM) voted to introduce seven changes to the methodology used to produce the SPM thresholds (see https://www.bls.gov/pir/spmhome.htm). The following changes go into effect with the release of the 2020 thresholds in September 2021.

The base of thresholds has been moved from the FCSU and S+U averages within the 30^th-36^th FCSU expenditure percentile range to 83 percent of the averages of the 47^th-53^rd percentile range of the FCSU distribution.
The estimation sample has been expanded from consumer units with exactly two children to consumer units with any number of children.
The CE Interview data are lagged by one year.
Imputed in-kind benefits from LIHEAP, NSLP, WIC, and rental assistance from government sources are added to the thresholds.
Telephone service expenditures are no longer geographically adjusted; in other words, they are no longer included with other utilities but are instead included along with food and clothing.
Home internet services expenditures have been added to the commodities explicitly accounted for in the thresholds.
To adjust the five years of CE Interview data to threshold year dollars, the All Items, Consumer Price Index for All Urban Consumers (All Items CPI-U) has been replaced by a composite “Food, Clothing, Shelter, Utilities, and telephone and internet service” price index; this is referred to as the FCSUti CPI-U.To examine the cumulative impact of these changes, revised versions of the 2019 thresholds are produced and compared to the 2019 published thresholds.

An additional change was introduced by the BLS-Census team after the September 30, 2020 meeting. A restriction that supports the team’s preference that shelter expenditures for owners are only those that owners incurred for where they live, and renter shelter expenditures reflect only those for where the renter lives. In other words, renter shelter expenditures incurred by owners for renters not living in the owner CU residence would not be counted in the production of the SPM thresholds, and vice versa for renters. As an example, renter expenditure made by an owner could be present in the original SPM Thresholds when an owner CU pays the rent of a family member who does not live with the owner CU.

The 2019 published thresholds are based on CE data collected in the CE Interview from 2015 quarter two through 2020 quarter one. One of the changes introduced is to lag the CE data by one year; in this case the thresholds are based on 2014 quarter two through 2019 quarter one. For both the previously published and revised 2019 thresholds, all expenditures (and in-kind benefits for the 2019 revised) are updated to 2019 using a price index.

Results

To examine the cumulative impact of these changes, revised versions of the 2019 thresholds are produced and compared to the 2019 published thresholds. As seen in Chart 1 below, the 2019 revised thresholds, with all seven changes incorporated, are $29,080 for owners with mortgages, $24,413 for owners without mortgages, and $29,194 for renters. The previously published 2019 thresholds are $29,234 for owners with mortgages, $24,980 for owners without mortgages, and $28,881 for renters. The differences between the revised 2019 and previously published are not statistically different from zero for any of the housing tenure groups. The 2019 revised threshold are lower for owners with and without mortgages, but higher for renters. Table 1 displays the differences in the expenditure shares for the 2019 revised and 2019 published SPM thresholds. As seen there, 2019 published thresholds are missing in-kind benefits (LIHEAP, NSLP, WIC, and rental assistance; also for the published thresholds, telephone is included in utilities. The 2019 revised threshold components include not just food, clothing, shelter and utilities (not including telephone), but telephone separately from other utilities plus internet, and in-kind benefits.

Table 1. Expenditure Shares of SPM Thresholds
	2019 Published	2019 Revised
SPM Owners with mortgages
Food	0.299	0.287
OOP Food	0.299	0.274
NSLP	.	0.011
WIC	.	0.002
Clothing	0.040	0.041
Shelter	0.340	0.349
OOP Shelter	0.340	0.349
Rental assistance	.	.
Utilities	0.159	0.091
OOP Utilities (including telephone)	0.159	0.144
OOP Utilities (no telephone)	.	0.091
OOP Telephone	.	0.052
OOP Internet	.	0.015
LIHEAP	.	0.000
Other	0.162	0.164
SPM Owners without mortgages
Food	0.350	0.341
OOP Food	0.350	0.326
NSLP	.	0.013
WIC	.	0.002
Clothing	0.047	0.049
Shelter	0.196	0.204
OOP Shelter	0.196	0.204
Rental assistance	.	.
Utilities	0.217	0.206
OOP Utilities (including telephone)	0.217	0.206
OOP Utilities (no telephone)	.	0.129
OOP Telephone	.	0.062
OOP Internet	.	0.018
LIHEAP	.	0.000
Other	0.190	0.196
SPM Renters
Food	0.302	0.286
OOP Food	0.302	0.273
NSLP	.	0.011
WIC	.	0.002
Clothing	0.041	0.041
Shelter	0.365	0.372
OOP Shelter	0.365	0.343
Rental assistance	.	0.029
Utilities	0.128	0.071
OOP Utilities (including telephone)	0.128	0.119
OOP Utilities (no telephone)	.	0.071
OOP Telephone	.	0.052
OOP Internet	.	0.015
LIHEAP	.	0.001
Other	0.164	0.164
Source: Bureau of Labor Statistics, U.S. Department of Labor, Consumer Expenditure Survey Interview Component with data collected in 2015Q2-2020Q1 for 2019 Published Thresholds and 2014Q2-2019Q1 for 2019 Revised Thresholds.

Impact of Each Change

In addition to comparing published vs revised thresholds, DPINR produced thresholds for each one of the adopted changes, that is 2019 published SPM plus one change. These thresholds are compared to the published 2019 thresholds to show the individual impact of each change, in terms of net difference, by housing tenure group. Charts 2, 3, and 4 display the difference between the thresholds, for each change, to the 2019 Published thresholds. Each chart represents a different housing tenure group. Because the adopted changes affect individual Consumer Units in different ways, the summation of all of the incorporated changes does not equal the actual impact of the 2019 revised thresholds.

Last Modified Date: April 5, 2022