IDEAS home Printed from https://ideas.repec.org/p/inq/inqwps/ecineq2020-552.html
   My bibliography  Save this paper

Changing the Housing Share of Poverty Thresholds for the Supplemental Poverty Measure: Does Consumer Unit Size Matter?

Author

Listed:
  • Trudi Renwick

    (U.S. Census Bureau)

  • Thesia I. Garner

    (Bureau of Labor Statistics)

Abstract

In producing the Supplemental Poverty Measure (SPM) thresholds and subsequent statistics, it is assumed that all consumer units, regardless of size and composition, share the same fraction of the thresholds on housing (shelter and utilities). The implication of this assumption is that the implicit economies of scale for housing are the same as those for the thresholds as a whole. If, on the other hand, one assumes that housing expenditures are subject to greater economies of scale than the food and clothing parts of the thresholds, it would be reasonable to use a larger percent to identify the housing portion of the thresholds for smaller families. This would have two consequences for SPM poverty statistics. First, the portion of the SPM thresholds subject to the geographic adjustment would be larger for smaller families --- increasing thresholds for those who live in areas with housing costs greater than the national median and decreasing thresholds for those who live in areas with lower housing costs Second, since the values of housing subsidies in SPM resources are capped at the housing portion of the thresholds, this would increase the value of housing subsidies for some smaller consumer units and could reduce their poverty rates. In this paper we investigate the impact of varying the housing share of the SPM poverty thresholds directly by changing housing directly first and then indirectly by applying differing equivalence scales by consumer unit size. American Community Survey (ACS) and U.S. Consumer Expenditure Interview Survey (CE) data are used to explore how housing expenditures as a share of income and expenditures on food, clothing shelter and utilities (FCSU), respectively, vary by consumer unit size. Data from the CE are also used to estimate equivalence scales; these scales result in indirect adjustment to the housing shares. The Current Population Survey Annual Social and Economic Supplement data are used to analyze the impact of allowing the housing share of the thresholds to vary on SPM poverty rates. Results suggest that choice of the housing shares (and equivalence scales) has very little impact on either overall poverty rates or the impact of housing assistance on poverty.

Suggested Citation

  • Trudi Renwick & Thesia I. Garner, 2020. "Changing the Housing Share of Poverty Thresholds for the Supplemental Poverty Measure: Does Consumer Unit Size Matter?," Working Papers 552, ECINEQ, Society for the Study of Economic Inequality.
  • Handle: RePEc:inq:inqwps:ecineq2020-552
    as

    Download full text from publisher

    File URL: http://www.ecineq.org/milano/WP/ECINEQ2020-552.pdf
    File Function: First version, 2020
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Equivalence Scales; Expenditure Based Poverty Thresholds.;

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inq:inqwps:ecineq2020-552. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Maria Ana Lugo (email available below). General contact details of provider: https://edirc.repec.org/data/ecineea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.