Panel Paper: Frequent Poverty Measurement

Saturday, November 8, 2014 : 10:35 AM
Taos (Convention Center)

*Names in bold indicate Presenter

Koji Chavez and Beth Red Bird, Stanford University
The U.S. releases the official and supplemental poverty rates only once a year and does so for a time period that has long since passed (i.e., an approximate 9 month delay). This lag makes it impossible to foresee looming demands on the safety net or to fashion a macroeconomic policy response to the country’s poverty rate. It is therefore of great value to develop poverty-related statistics that are calculable using monthly CPS data and that can then be released as interim reports in advance of the annual poverty measurement releases.

The Stanford Center on Poverty and Inequality has developed a new battery of quarterly poverty measures (QPM) that will allow the U.S. to better monitor how the poverty rate is changing. The QPM battery, which will be seasonally adjusted, will be released within months after the time period to which it pertains and thus provide an assessment of poverty that comes closer to the frequency insisted upon for all other key labor market measures (e.g., unemployment). The QPM battery will be reported for the country as a whole, four U.S. regions, and key demographic groups.

The research team has calculated the following measures:  (1) quarterly measures based on family income, which are comparable to the annual official poverty measure, (2) quarterly poverty measures based on weekly wages, which provide an almost instantaneous meaure of “earnings poverty,” and (3) quarterly measures of nonworking poverty units. The presentation will also preview SPM versions of each of the above measures and demographic breakdowns. Finally, the presentation will compare the new measures to official measures and demonstrate the validity of the imputation and seasonal adjustment methods employed in computing these frequent and up-to-date national poverty measures.

We plan to begin releasing the measures later this year, and APPAM will provide the first formal presentation of our methodology and approach.