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The Supplemental Expenditure Poverty Measure: A New Method for Measuring Poverty

Author

Listed:
  • Moffitt, Robert

    (Johns Hopkins University, Department of Economics)

Abstract
We propose a new measure of the rate of poverty we call the Supplemental Expenditure Poverty Measure (SEPM) based on expenditure in the Consumer Expenditure survey. It treats household expenditure as a measure of resources available to purchase the minimum bundle necessary to meet basic needs. Our measure differs from conventional income and consumption poverty in both concept and measurement and it has advantages relative to both. Poverty rates using our basic measure are very close in level and recent trend to those of the most preferred income-based poverty rate produced by the Census Bureau. But our SEPM poverty rate differs from the Census measure at different levels of the poverty line. For example, that the number of individuals living in either poor or “almost” poor households is 5 percentage points greater (about 16 million individuals) using our measure. We also construct an augmented measure that adds additional potential liquid resources. This “maximal resources” measure indicates that if disadvantaged households used up all their bank balances and maximized their credit card borrowing, 9.6 percent of the population (over 31 million individuals) would still be poor and unable to purchase the goods necessary for the basic needs of life.

Suggested Citation

  • Moffitt, Robert, 2022. "The Supplemental Expenditure Poverty Measure: A New Method for Measuring Poverty," Economics Working Paper Archive 66918, The Johns Hopkins University,Department of Economics.
    • Handle: RePEc:jhu:papers:66918
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    File URL: http://jhir.library.jhu.edu/handle/1774.2/66918
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    Cited by:

    1. Schanzenbach, Diane Whitmore, 2023. "Understanding SNAP: An overview of recent research," Food Policy, Elsevier, vol. 114(C).
    2. Hua Zan & Jessie X. Fan & Benvin Lozada, 2024. "The economic disparity between Hispanic and non‐Hispanic White households: An analysis of middle‐class achievement," American Journal of Economics and Sociology, Wiley Blackwell, vol. 83(1), pages 93-107, January.
    3. Jonathan Fisher & Bradley L. Hardy, 2023. "Money matters: consumption variability across the income distribution," Fiscal Studies, John Wiley & Sons, vol. 44(3), pages 275-298, September.

    More about this item

    Keywords

    Keywords; Poverty; Consumer Expenditure Survey;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

    NEP fields

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