Updating the federal poverty measure

from the San Jose Mercury News

STANFORD SCHOLARS AT CENTER OF EFFORT
By Sarah Frier

Stanford University scholars are working to create a more accurate way of measuring poverty than the federal government formulas in place since 1963.

The only factors that have been used to determine the federal poverty index are income, family size and family composition. The proposed Stanford poverty index would also account for government benefits, such as food stamps and tax credits, and expenses, such as child care and heating bills.

"The current measure of poverty is grossly inadequate and doesn't accurately represent the actual needs of families or their actual income after various transfers," said David Grusky, director of the Center for the Study of Poverty and Inequality at Stanford and a member of the national advisory board that is developing a new poverty index.

The new index, to be implemented by early next year, would provide the public easy access to poverty information through a Web site. The public would be able to interactively simulate the impact of policy decisions, such as a change in food stamp eligibility requirements, on poverty levels, Grusky said.

Such information already exists, but in "rather obscure census publications," said Barbara Bergmann, a member of the advisory board and professor emeritus of economics at the University of Maryland.

This year, the advisory board will decide the best way to compose the index and collect data from other publications.

Grusky said he hopes the board's efforts will lead to informed government and voter decision-making.

"Measurement matters," Grusky said. "It's hard to make good policy decisions when they're not grounded in good data."

The scholars hope the government will scrap its current poverty index and replace it with what they call the Stanford Poverty Count, which will be released annually.