Measuring the Well-Being of the Poor Using Income and Consumption

59 Pages Posted: 8 Jun 2003 Last revised: 3 Nov 2010

See all articles by Bruce D. Meyer

Bruce D. Meyer

University of Chicago - Harris Public Policy; National Bureau of Economic Research (NBER)

James X. Sullivan

University of Notre Dame - Department of Economics and Econometrics

Date Written: June 2003

Abstract

We evaluate consumption and income measures of the material well-being of the poor. We begin with conceptual and pragmatic reasons that favor income or consumption. Then, we empirically examine the quality of standard data by studying measurement error and under-reporting, and by comparing micro-data from standard surveys to administrative micro-data and aggregates. We also compare low reports of income and consumption to other measures of hardship and well-being. The closer link between consumption and well-being and its better measurement favors the use of consumption when setting benefits and evaluating transfer programs. However, income retains its convenience for determining program eligibility.

Suggested Citation

Meyer, Bruce D. and Sullivan, James X., Measuring the Well-Being of the Poor Using Income and Consumption (June 2003). NBER Working Paper No. w9760. Available at SSRN: https://ssrn.com/abstract=414258

Bruce D. Meyer (Contact Author)

University of Chicago - Harris Public Policy ( 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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