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Poster #72 - Moving to the Household Unit of Analysis for Poverty Measurement
Friday, November 14, 5:00 to 6:30pm, Property: Hyatt Regency Seattle, Floor: 7th Floor, Room: 710 - Regency BallroomAbstract
In 2023, the Committee on National Statistics (CNSTAT) released a consensus report, “An Updated Measure of Poverty: (Re)Drawing the Line,” providing an assessment of the strengths and shortcomings of the Supplemental Poverty Measure (SPM) which is produced annually by the U.S. Census Bureau in collaboration with the Bureau of Labor Statistics. This CNSTAT report suggested potential improvements to the SPM and highlighted areas of future research. This paper will present a comprehensive analysis of one of these recommendations, Recommendation 2.7, which suggests that the SPM should consider using the household as the unit of analysis.
To determine whether an individual is considered poor under a given poverty measure, one must first define which persons share resources. A resource-sharing unit is typically defined as individuals who live together and share income or expenses. The official poverty measure uses the family (individuals who live together and are related by birth, marriage or adoption) as the resource-sharing unit. Recognizing that unmarried partners often share resources, the SPM adopted a broader unit of analysis which expands the family to include unmarried, cohabiting partners and their relatives as well as foster children under age 22 and any unrelated children in the household under age 15. The CNSTAT panel report recommends expanding the resource-sharing unit further to encompass all individuals residing together in a household.
Moving to the household as the unit of analysis has several advantages—it is consistent with definitions used by international statistical organizations; it is transparent and easy to understand; and it is easily defined in surveys without collecting detailed household relationships. This paper examines the literature on how individuals share resources within households and discusses theoretical and practical implications for expanding the unit of analysis. Additionally, this paper provides a demographic portrait of the population impacted by this change and estimates the impact of moving to the household unit of analysis on SPM poverty rates.