Further Results on Measuring the Well-Being of the Poor Using Income and Consumption

50 Pages Posted: 24 Sep 2007 Last revised: 27 Aug 2010

See all articles by Bruce D. Meyer

Bruce D. Meyer

University of Chicago - Irving B. Harris Graduate School of Public Policy Studies; National Bureau of Economic Research (NBER)

James X. Sullivan

University of Notre Dame - Department of Economics and Econometrics

Date Written: September 2007

Abstract

In the U.S., analyses of poverty rates and the effects of anti-poverty programs rely almost exclusively on income data. In earlier work (Meyer and Sullivan, 2003) we emphasized that conceptual arguments generally favor using consumption data to measure the well-being of the poor, and, on balance, data quality issues favor consumption in the case of single mothers. Our earlier work did not show that income and consumption differ in practice. Here we further examine data quality issues and show that important conclusions about recent trends depend on whether one uses consumption or income. Changes in the distribution of resources for single mothers differ sharply in recent years depending on whether measured by income or consumption. Measures of overall and sub-group poverty also sharply differ. In addition to examining broader populations and a longer time period, we also consider new dimensions of data quality such as survey and item nonresponse, imputation, and precision. Finally, we demonstrate the flaws in a recent paper that compares income and consumption data.

Suggested Citation

Meyer, Bruce D. and Sullivan, James X., Further Results on Measuring the Well-Being of the Poor Using Income and Consumption (September 2007). NBER Working Paper No. w13413. Available at SSRN: https://ssrn.com/abstract=1016334

Bruce D. Meyer (Contact Author)

University of Chicago - Irving B. Harris Graduate School of Public Policy Studies ( email )

1155 East 60th Street
Chicago, IL 60637
United States
(773) 702-2712 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

James X. Sullivan

University of Notre Dame - Department of Economics and Econometrics ( email )

Notre Dame, IN 46556
United States

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