Morning Must-Read: Christopher Wimer et al.: Trends in Poverty with an Anchored Supplemental Poverty Measure
Christopher Wimer et al.: Trends in Poverty with an Anchored Supplemental Poverty Measure:
Poverty measures set a poverty line or threshold and then evaluate resources against that threshold. The official poverty measure is flawed... it uses thresholds that are outdated and are not adjusted appropriately... and it uses an incomplete measure of resources which fails to take into account the full range of income and expenses that individuals and households have.... In recent work, we have produced SPM-like estimates for the period 1967-2012.... In this report we apply an alternative poverty measure which differs from the SPM in only one respect. Instead of having a threshold that is re-calculated over time, we use today’s threshold and carry it back historically by adjusting it for inflation using the CPI-U-RS. Because this alternative measure is anchored with today’s SPM threshold, we refer to as an anchored supplemental poverty measure or anchored SPM for short.... Another advantage of an anchored SPM (or any absolute poverty measure, for that matter) is that poverty trends resulting from such a measure can be explained by changes in income and net transfer payments (cash or in kind)...
