Poverty and the Distribution of Material Hardship
Public concern with poverty derives in large part from the assumption that low income families cannot afford necessities. Yet official poverty statistics focus on measuring income, not on measuring material hardship. Two surveys of Chicago residents measure whether families could afford food, housing and medical care. A family's official income-to-needs ratio explained 24 percent of the variance in the amount of material hardship it reported. Adjustments for family size, age, health, noncash benefits, home ownership, and access to credit explain another 15 percent. Variations in permanent income explain almost none of the remaining variance in hardship. Among families with the same official income-to-needs ratio, material hardship varies by age, family size and composition.
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