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The Poverty of the Poverty Rate: Measure and Mismeasure of Material Deprivation in Modern America
Since its inception in 1965, America's official poverty rate (OPR) has been the single most important statistic used by policymakers and concerned citizens to evaluate success or failure in the nation's ongoing struggle against material need. But in a critical new examination of this widely followed measure, Nicholas Eberstadt charges that the OPR is, in reality, "a broken compass"―a flawed index generating increasingly misleading numbers about poverty in the United States.
The OPR was originally intended to track an absolute level of poverty over time by comparing a family's reported pretax income against a corresponding poverty threshold. But for the past three decades, the OPR has reported trends that are jarringly inconsistent with other statistical indicators of material deprivation. What is the reason for this curious discrepancy? Eberstadt suggests that the OPR's most serious problem is its implicit assumption that poor families will spend no more than their reported annual incomes―in other words, that their income levels are an accurate proxy for their consumption levels. In the decades since the OPR was unveiled, the disparity between reported income and expenditures has progressively widened, making income an ever less reliable predictor of consumption patterns―and, consequently, living standards―for America's poorer families.
In The Poverty of "The Poverty Rate," Eberstadt contends that the defects of the current poverty rate are not only severe but irremediable. Income-based measures cannot offer a faithful portrait of consumption patterns or material well-being in the United States. Central though the OPR has become to antipoverty policy, this "untrustworthy yardstick" should be discarded and replaced by more accurate measures of deprivation.
The OPR was originally intended to track an absolute level of poverty over time by comparing a family's reported pretax income against a corresponding poverty threshold. But for the past three decades, the OPR has reported trends that are jarringly inconsistent with other statistical indicators of material deprivation. What is the reason for this curious discrepancy? Eberstadt suggests that the OPR's most serious problem is its implicit assumption that poor families will spend no more than their reported annual incomes―in other words, that their income levels are an accurate proxy for their consumption levels. In the decades since the OPR was unveiled, the disparity between reported income and expenditures has progressively widened, making income an ever less reliable predictor of consumption patterns―and, consequently, living standards―for America's poorer families.
In The Poverty of "The Poverty Rate," Eberstadt contends that the defects of the current poverty rate are not only severe but irremediable. Income-based measures cannot offer a faithful portrait of consumption patterns or material well-being in the United States. Central though the OPR has become to antipoverty policy, this "untrustworthy yardstick" should be discarded and replaced by more accurate measures of deprivation.
- GenresEconomics
196 pages, Paperback
First published September 30, 2008
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September 27, 2015
Excellent analysis of the inadequacy of the Official Poverty Rate as a measure of material deprivation in the US. In spite of its inadequacy, the OPR continues to be used. Unless we can classify and measure the amount of absolute poverty, we have no way to assess the effectiveness of poverty programs. As currently used, the OPR makes it look like progress has stagnated -- when in fact, the material well being (as measured by consumption, standard of living, and biometric measures) of the bottom quintile (by income) in the US has substantially improved in the past 20 years.
This work hints at the misplaced emphasis on income inequality --and attempts to redirect our focus on getting an accurate measure of absolute poverty as defined by material, and perhaps opportunity, deprivation.
This work hints at the misplaced emphasis on income inequality --and attempts to redirect our focus on getting an accurate measure of absolute poverty as defined by material, and perhaps opportunity, deprivation.
Displaying 1 of 1 review