Economic Well-Being Based on Income, Consumer Expenditures and Personal Assessments of Minimal Needs
Responses to minimum income and minimum spending questions are used to produce economic well-being thresholds. Thresholds are estimated using a regression framework. Regression coefficients are based on U.S. Survey of Income and Program Participation (SIPP) data and then applied to U.S. Consumer Expenditure Survey (CE) data. Three different resource measures are compared to the estimated thresholds. The first resource measure is total before-tax money income, and the other two are expenditure based. The first of these two refers to expenditure outlays and the second to outlays adjusted for the value of the service flow of owner-occupied housing (rental equivalence). The income comparison is based on SIPP data while the outlays comparisons are based on CE data. Results using official poverty thresholds are shown for comparison. This is among the earliest work in the U.S. in which expenditure outlays have been used for economic well-being determinations in combination with personal assessments, and the first time rental equivalence has been used in such an exercise. Comparisons of expenditures for various bundles of commodities are compared to the CE derived thresholds to provide insight concerning what might be considered minimum or basic. Results reveal that CE and SIPP MIQ thresholds are higher than MSQ thresholds, and resulting poverty rates are also higher with the MIQ. CE-based MSQ thresholds are not statistically different from average expenditure outlays for food, apparel, and shelter and utilities for primary residences. When reported rental equivalences for primary residences that are owner occupied are substituted for out-of-pocket shelter expenditures, single elderly are less likely to be as badly off as they would be with a strict outlays approach in defining resources.
|Date of creation:||Mar 2005|
|Contact details of provider:|| Postal: 2 Massachusetts Avenue, N.E. Room 2860, Washington, D. C. 20212|
Phone: (202) 606-5900
Fax: (202) 606-7890
Web page: https://www.bls.gov
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Van Praag, Bernard, 1971.
"The welfare function of income in Belgium: An empirical investigation,"
European Economic Review,
Elsevier, vol. 11(3), pages 337-369.
- Van Praag, Bernard, 1971. "The welfare function of income in Belgium: An empirical investigation," European Economic Review, Elsevier, vol. 2(3), pages 337-369.
- Hagenaars, Aldi J M & van Praag, Bernard M S, 1985. "A Synthesis of Poverty Line Definitions," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 31(2), pages 139-154, June.
- Danziger, Sheldon, et al, 1984. "The Direct Measurement of Welfare Levels: How Much Does It Cost to Make Ends Meet?," The Review of Economics and Statistics, MIT Press, vol. 66(3), pages 500-505, August.
- Thesia I. Garner & Kathleen Short, 2005. "Personal Assessments of Minimum Income and Expenses: What Do They Tell Us about 'Minimum Living' Thresholds and Equivalence Scales?," Working Papers 379, U.S. Bureau of Labor Statistics.
- Menno Pradhan & Martin Ravallion, 2000. "Measuring Poverty Using Qualitative Perceptions Of Consumption Adequacy," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 462-471, August.
- Björn Gustafsson & Li Shi & Hiroshi Sato, 2004. "Can a subjective poverty line be applied to China? Assessing poverty among urban residents in 1999," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(8), pages 1089-1107.
- Arie Kapteyn & Peter Kooreman & Rob Willemse, 1988. "Some Methodological Issues in the Implementation of Subjective Poverty Definitions," Journal of Human Resources, University of Wisconsin Press, vol. 23(2), pages 222-242.
- Kapteyn, A.J. & Kooreman, P. & Willemse, R., 1987. "Some methodological issues in the implementation of subjective poverty definitions," Research Memorandum FEW 245, Tilburg University, School of Economics and Management.
- Lanjouw, Jean Olson & Lanjouw, Peter, 2001. "How to Compare Apples and Oranges: Poverty Measurement Based on Different Definitions of Consumption," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(1), pages 25-42, March.
- Diane Colasanto & Arie Kapteyn & Jacques van der Gaag, 1984. "Two Subjective Definitions of Poverty: Results from the Wisconsin Basic Needs Study," Journal of Human Resources, University of Wisconsin Press, vol. 19(1), pages 127-138.
- Trudi Renwick, 1998. "Basic Needs Budgets Revisited: Does the U.S. Consumer Price Index Overestimate the Changes in the Cost of Living for Low-Income Families?," Feminist Economics, Taylor & Francis Journals, vol. 4(3), pages 129-142.
- Craig Gundersen & Victor Oliveira, 2001. "The Food Stamp Program and Food Insufficiency," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 875-887.
- Trudi J. Renwick & Barbara R. Bergmann, 1993. "A Budget-Based Definition of Poverty: With an Application to Single-Parent Families," Journal of Human Resources, University of Wisconsin Press, vol. 28(1), pages 1-24.
- Daniel T. Slesnick, 1998. "Empirical Approaches to the Measurement of Welfare," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2108-2165, December.
- de Vos, Klaas & Garner, Thesia I, 1991. "An Evaluation of Subjective Poverty Definitions: Comparing Results from the U.S. and the Netherlands," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(3), pages 267-285, September.
- Slesnick, Daniel T, 1993. "Gaining Ground: Poverty in the Postwar United States," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 1-38, February. Full references (including those not matched with items on IDEAS)