Comparing Poverty Rates by Official and Experimental Measures in the United States
By: Ke Bin Wu, AARP Public Policy Institute; | December 31, 2005
Because the official poverty measure in the United States is used for setting guidelines for eligibility for public programs, it directly affects the quality of daily life for individuals and families with low incomes. The current official poverty measure was developed in the early 1960s. Concerns about the level and extent of poverty estimates and the methodology that should be used to measure poverty have been increasing among academic researchers and policymakers.
Since 1999, the U.S. Bureau of the Census has published a series of reports on estimates of experimental (or alternative) measures of poverty rates in the United States based on implementations of the combined recommendations of a National Academy of Science (NAS) panel and on new survey data that were developed. This report presents experimental measures of poverty as of 2001, particularly focusing on the population age 65 and older.
The results from the Census Bureau reports and our analysis show that the experimental poverty rates are higher than the current official poverty rates, particularly for older persons in 2001. The results indicate that it is important to precisely include medical out-of-pocket expenditures in experimental poverty estimates. The results also suggest that reducing the burden of medical out-of-pocket expenditures on older persons, (through prescription drug coverage under Medicare, for example), could potentially have a significant effect on reduction of poverty in this population. (10 pages)
Pub ID: DD129
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