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Evaluating the effects of geographic adjustments on poverty measures using self‐reported financial well‐being

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  • Jeff Larrimore

Abstract

A central aspect of poverty measurement is identifying the people and places experiencing financial hardships. This paper explores this relationship using the Consumer Financial Protection Bureau's Financial Well‐Being Scale, which reflects individuals’ self‐assessments of financial challenges. Using this measure, for every 1 percentage point increase in a state's official poverty rate for working‐age adults, there is a 0.59 percentage point increase in the share with low financial well‐being. In contrast, the supplemental poverty rate is negatively correlated with the financial hardship using the CFPB measure. This reflects the supplemental poverty measure's geographic adjustment shifting poverty towards areas with lower rates of financial hardship.

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  • Jeff Larrimore, 2025. "Evaluating the effects of geographic adjustments on poverty measures using self‐reported financial well‐being," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 44(1), pages 295-303, January.
    • Handle: RePEc:wly:jpamgt:v:44:y:2025:i:1:p:295-303
    DOI: 10.1002/pam.22633
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    References listed on IDEAS

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    1. Lu Fan & Robin Henager, 2022. "A Structural Determinants Framework for Financial Well-Being," Journal of Family and Economic Issues, Springer, vol. 43(2), pages 415-428, June.
    2. Richard V. Burkhauser & Kevin Corinth & James Elwell & Jeff Larrimore, 2024. "Evaluating the Success of the War on Poverty since 1963 Using an Absolute Full-Income Poverty Measure," Journal of Political Economy, University of Chicago Press, vol. 132(1), pages 1-47.
    3. Bruce D. Meyer & James X. Sullivan, 2012. "Identifying the Disadvantaged: Official Poverty, Consumption Poverty, and the New Supplemental Poverty Measure," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 111-136, Summer.
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