A New Way to Measure Poverty

The official federal poverty measure, designed in the 1960s, is the most commonly used indicator of economic hardship in America. Unfortunately, it provides no guidance on pressing questions like the role of regional price variations on poverty or the impact of Food Stamps.

Researchers have been aware of these deficiencies for some time. Now the Census Bureau will begin reporting supplemental poverty measures based on recommendations from the National Academy of Sciences. These new measures will take into account the impact of taxation, in-kind public assistance and medical out-of-pocket costs, and will use more realistic poverty thresholds.

While this is a new step at the federal level, the City of New York has been working on alternative poverty measures since 2008. The efforts of New York City's Center for Economic Opportunity are described here in today's New York Times. A copy of CEO's new report is available on CEO's website for download. It describes the development of the measure as well as poverty trends in NYC between 2005 and 2008.