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

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.

[1]  D. Slesnick.  Gaining Ground: Poverty in the Postwar United States , 1993, Journal of Political Economy.

[2]  W. Primus,et al.  The Initial Impacts of Welfare Reform on the Incomes of Single-Mother Families. , 1999 .

[3]  Jonathan Gruber,et al.  The Consumption Smoothing Benefits of Unemployment Insurance , 1994 .

[4]  G. Duncan,et al.  How Welfare and Work Policies Affect Children: A Synthesis of Research. , 2001 .

[5]  Jeffrey C. Moore,et al.  THE SIPP COGNITIVE RESEARCH EVALUATION EXPERIMENT: BASIC RESULTS AND DOCUMENTATION , 1996 .

[6]  L. Stinson,et al.  Income Measurement Error in Surveys: A Review , 2000 .

[7]  Bruce D. Meyer,et al.  The Effects of Welfare and Tax Reform: The Material Well-Being of Single Mothers in the 1980s and 1990s , 2001 .

[8]  J. Poterba,et al.  Is the Gasoline Tax Regressive? , 1991, Tax Policy and the Economy.

[9]  D. Feenberg,et al.  An introduction to the TAXSIM model , 1993 .

[10]  E. Branch.  The Consumer Expenditure Survey: A Comparative Analysis , 1994 .

[11]  N. Lustig,et al.  World development report 2000/2001 : attacking poverty , 2001 .

[12]  K. Woodrow,et al.  Estimation of population coverage in the 1990 United States census based on demographic analysis. , 1993, Journal of the American Statistical Association.

[13]  P. Loprest,et al.  Where Are They Now? What States' Studies of People Who Left Welfare Tell Us. Assessing the New Federalism. An Urban Institute Program To Assess Changing Social Policies. Series A, No. A-32. , 1999 .

[14]  G. Duncan,et al.  Evidence on the Validity of Cross-Sectional and Longitudinal Labor Market Data , 1994, Journal of Labor Economics.

[15]  John Bound,et al.  Measurement error in survey data , 2001 .

[16]  John Bound,et al.  The Extent of Measurement Error in Longitudinal Earnings Data: Do Two Wrongs Make a Right? , 1988, Journal of Labor Economics.

[17]  Susan E. Mayer.  What Money Can't Buy: Family Income and Children's Life Chances , 1997 .

[18]  Christopher R. Bollinger,et al.  Estimation With Response Error and Nonresponse , 2001 .

[19]  L. Lein,et al.  Making Ends Meet: How Single Mothers Survive Welfare and Low-Wage Work , 1997 .

[20]  Susan E. Mayer,et al.  Who Has Benefited from Economic Growth in the United States Since 1969? The Case of Children , 2004 .

[21]  J. Sabelhaus,et al.  Can Permanent-Income Theory Explain Cross-Sectional Consumption Patterns? , 2000, Review of Economics and Statistics.

[22]  M. Bitler,et al.  WIC Eligibility and Participation , 2003 .

[23]  R. Blundell,et al.  Partial Insurance, Information, and Consumption Dynamics , 2002 .

[24]  Susan E. Mayer,et al.  Poverty and the Distribution of Material Hardship , 1989 .

[25]  A. Atkinson.  Comparing poverty rates internationally : lessons from recent studies in developed countries , 1991 .

[26]  M. Roemer.  Assessing the Quality of the March Current Population Survey and the Survey of Income and Program Participation Income Estimates, 1990 - 1996 , 2000 .

[27]  A. Deaton.  The Analysis of Household Surveys : A Microeconometric Approach to Development Policy , 1997 .

[28]  Anne E. Polivka,et al.  Measuring Employment and Income for Low-Income Populations with Administrative and Survey Data , 2001 .

[29]  J. Skinner,et al.  A SUPERIOR MEASURE OF CONSUMPTION FROM THE PANEL STUDY OF INCOME DYNAMICS , 1987 .

[30]  J. Rogers,et al.  CE Data: Quintiles of Income versus Quintiles of Outlays , 1994 .

[31]  H. Hogan.  The 1990 Post-Enumeration Survey: operations and results. , 1993, Journal of the American Statistical Association.

[32]  Constance F. Citro,et al.  Measuring poverty : a new approach , 1995 .

[33]  Lawrence F. Katz,et al.  Macroeconomic Performance and the Disadvantaged , 1991 .

[34]  R. Blundell,et al.  Consumption Inequality and Income Uncertainty , 2002 .