Indicators of Welfare Dependence: Annual Report to Congress, 2009-2013. Economic Security Risk Factor 3. Experimental Poverty Measures

04/01/2013

Figure ECON 3. Percentage of Persons in Poverty Using Various Experimental Poverty Measures by Age: 2009

Note: These measures use versions of 1999 Consumer Expenditure-based poverty thresholds that are updated annually using the CPI-U.

These experimental poverty measures implement changes recommended by a 1995 National Academy of Sciences panel, including: counting certain non-cash benefits as income; subtracting from income certain work-related, health and child care expenses; introducing new poverty thresholds; and adjusting those thresholds for geographic differences in housing costs. The three alternative measures are similar, except that each accounts for medical out-of-pocket expenses (MOOP) differently. The first alternative (MOOP subtracted from income or MSI) subtracts out-of-pocket medical expenses from income. The second alternative (MOOP in the threshold or MIT) increases the poverty thresholds to take MOOP expenses into account. The third measure, CMB for combined methods, combines attributes of the previous two measures. Each of the three measures is calculated with and without accounting for geographic adjustments (GA and NGA).

Pleases note that the estimates for 2009 are not strictly comparable with earlier estimates because capital gains and losses are not included in this year's estimate.

Source: U.S. Census Bureau, “Alternative Poverty Estimates Based on National Academy of Sciences Recommendations, by Geographic and Inflationary Adjustments,” available online at http://www.census.gov/hhes/povmeas/data/nas/tables/2009/index.html and unpublished CPS data from the U.S. Census Bureau.

  • Figure ECON 3 shows the percentage of persons in poverty using various experimental poverty measures by age in 2009. Three experimental measures of poverty (developed by the U.S. Census Bureau in response to the recommendations of a 1995 panel of the National Academy of Sciences) yield poverty rates that are similar to the official poverty measure overall, but differ by age and other characteristics.
  • Experimental measures generally show lower poverty rates among children than the official measure, partly because they take into account non-cash benefits that many children receive. Conversely, experimental measures show higher rates of poverty among the elderly than the official measure, in part due to taking into account certain out-of-pocket health costs for these measures.
  • All three alternative measures shown in Figure ECON 3 are versions that do not take into account geographic adjustments for housing costs (NGA); there also are versions that do take into account those geographic adjustments (GA), as shown in Tables ECON 3a and 3b.
Table ECON 3a. Percentage of Persons in Poverty Using Various Experimental Poverty Measures by Selected Characteristics: 2009
 
  Official No Geographic Adjustment Geographic Adjustment
Alternative 1 (MSI-NGA) Alternative 2 (MIT-NGA) Alternative 3 (CMB-NGA) Alternative 1 (MSI-GA) Alternative 2 (MIT-GA) Alternative 3 (CMB-GA)
All Persons 14.3 12.8 13.3 13.5 12.9 13.2 13.6
Racial/Ethnic Categories
Non-Hispanic White 9.4 9.3 9.5 9.7 8.7 8.8 9.2
Non-Hispanic Black 25.6 20.4 21.0 21.4 19.7 20.0 20.6
Hispanic 25.3 21.0 22.3 22.1 23.5 24.9 25.0
Age Categories
Children ages 0-17 20.7 14.0 15.1 14.8 14.2 15.1 15.0
Adults ages 18-64 12.9 12.2 12.9 12.7 12.3 12.9 12.9
Adults ages 65 and over 8.9 13.9 11.6 14.6 13.4 11.1 14.3

Note: These measures use versions of 1999 Consumer Expenditure-poverty thresholds that are updated annually using the CPI-U.

These experimental poverty measures implement changes recommended by a 1995 National Academy of Sciences panel, including: counting certain non-cash benefits as income; subtracting from income certain work-related, health and child care expenses; introducing new poverty thresholds; and adjusting those thresholds for geographic differences in housing costs. The three alternative measures are similar, except that each accounts for medical out-of-pocket expenses (MOOP) differently. The first alternative (MOOP subtracted from income or MSI) subtracts out-of-pocket medical expenses from income. The second alternative (MOOP in the threshold or MIT) increases the poverty thresholds to take MOOP expenses into account. The third measure, CMB for combined methods, combines attributes of the previous two measures. Each of the three measures is calculated with and without accounting for geographic adjustments (GA and NGA).

Persons of Hispanic ethnicity may be of any race. Beginning in 2002, estimates for Whites and Blacks are for persons reporting a single race only. Persons who reported more than one race are included in the total for all persons but are not shown under any race category. Due to small sample size, American Indians/Alaska Natives, Asians and Native Hawaiians/Other Pacific Islanders are included in all persons but not shown separately.

Source: U.S. Census Bureau, “Alternative Poverty Estimates Based on National Academy of Sciences Recommendations, by Geographic and Inflationary Adjustments,” available online at http://www.census.gov/hhes/povmeas/data/nas/tables/2009/index.html and unpublished CPS data from the U.S. Census Bureau.

Table ECON 3b. Percentage of Persons in Poverty Using Various Experimental Poverty Measures: 1999-2009

  1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Official Poverty Measure 11.9 11.3 11.7 12.1 12.5 12.7 12.6 12.3 12.5 13.2 14.3
No Geographic Adjustment of Thresholds
Medical costs alternative 1 (MSI-NGA) 12.2 12.1 12.4 12.4 12.4 12.7 12.6 12.4 12.6 12.8 12.8
Medical costs alternative 2 (MIT-NGA) 12.8 12.7 12.8 13.0 12.8 13.1 13.0 12.8 12.9 13.1 13.3
Medical costs alternative 3 (CMB-NGA) 12.9 12.8 13.0 13.0 13.0 13.3 13.3 13.0 13.2 13.4 13.5
Geographic Adjustment of Thresholds
Medical costs alternative 1 (MSI-GA) 12.1 12.0 12.3 12.3 12.3 12.5 12.5 12.2 12.6 12.8 12.9
Medical costs alternative 2 (MIT-GA) 12.7 12.5 12.7 12.8 12.7 13.0 13.0 12.6 13.0 13.2 13.2
Medical costs alternative 3 (CMB-GA) 12.8 12.6 12.9 12.9 12.9 13.3 13.1 12.9 13.3 13.4 13.6

Note: These measures use versions of 1999 Consumer Expenditure-based poverty thresholds that are updated annually using the CPI-U.

These experimental poverty measures implement changes recommended by a 1995 National Academy of Sciences panel, including: counting certain non-cash benefits as income; subtracting from income certain work-related, health and child care expenses; introducing new poverty thresholds; and adjusting those thresholds for geographic differences in housing costs. The three alternative measures are similar, except that each accounts for medical out-of-pocket expenses (MOOP) differently. The first alternative (MOOP subtracted from income or MSI) subtracts out-of-pocket medical expenses from income. The second alternative (MOOP in the threshold or MIT) increases the poverty thresholds to take MOOP expenses into account. The third measure, CMB for combined methods, combines attributes of the previous two measures. Each of the three measures is calculated with and without accounting for geographic adjustments (GA and NGA).

Source: U.S. Census Bureau, “Alternative Poverty Estimates Based on National Academy of Sciences Recommendations, by Geographic and Inflationary Adjustments,” available online at http://www.census.gov/hhes/povmeas/data/nas/tables/2009/index.html and unpublished CPS data from the U.S. Census Bureau.

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