IDEAS home Printed from https://ideas.repec.org/p/har/wpaper/0416.html
   My bibliography  Save this paper

Three Decades of Consumption and Income Poverty

Author

Listed:
  • Bruce D. Meyer
  • James X. Sullivan

Abstract

This paper examines the measurement of poverty in the United States from 1972 through 2004. We investigate how poverty rates and poverty gaps have changed over time, explore how these trends differ across demographic groups, and contrast these trends for several different income and consumption based measures of poverty. We also examine how sensitive different measures of poverty are to assumptions about equivalence scales, price adjustments, and the definition of the resource sharing unit. We document sharp differences, particularly in recent years, between different income based poverty measures, and between income and consumption based poverty rates and gaps. We find that sensible changes from the official price index and resource sharing unit tend to lead to substantial declines in measured income poverty rates, but our equivalence scale changes have only a small impact. We show moving from the official pre-tax money income measure to a disposable income measure that incorporates transfers and fringe benefits has a substantial effect on poverty rate changes over the past two decades. Furthermore, consumption based poverty rates often indicate large declines, even in recent years when income based poverty rates have risen. The patterns are very different across demographic groups, with aggregation hiding generally larger differences between income and consumption poverty rate changes, especially for the elderly. Income and consumption measures of deep poverty and poverty gaps have generally moved sharply in opposite directions in the last two decades with income deep poverty and poverty gaps rising, but consumption based deep poverty and poverty gaps falling. Although there are some practical limitations to an official, consumption based measure of poverty, we argue that consumption poverty is preferred for measuring changes in the well-being of the worst off.

Suggested Citation

  • Bruce D. Meyer & James X. Sullivan, 2006. "Three Decades of Consumption and Income Poverty," Working Papers 0416, Harris School of Public Policy Studies, University of Chicago.
  • Handle: RePEc:har:wpaper:0416
    as

    Download full text from publisher

    File URL: http://harrisschool.uchicago.edu/about/publications/working-papers/pdf/wp_04_16.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hojman, Daniel & Kast, Felipe, 2009. "On the Measurement of Poverty Dynamics," Working Paper Series rwp09-035, Harvard University, John F. Kennedy School of Government.

    More about this item

    Keywords

    consumption; income poverty; trends;

    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:har:wpaper:0416. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Eleanor Cartelli). General contact details of provider: http://edirc.repec.org/data/spuchus.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.