5 ms·

The US Census threshold-based poverty rate does OK at country-level aggregates, but it flatters high-cost/high-income places and exaggerates the problems of low

by Kalium 6y ago

The US Census threshold-based poverty rate does OK at country-level aggregates, but it flatters high-cost/high-income places and exaggerates the problems of low-cost/low-income places. We might be better served by using the Census Bureau's supplemental poverty rates. It has a significant impact on rates: https://www.census.gov/library/publications/2020/demo/p60-272.html https://www.census.gov/library/publications/2020/demo/p60-27... California's, for example, goes from 12-ish percent (average) to 18-ish percent (below only DC).

md_ 6y ago
Thanks!
deleted 6y ago
[deleted]
pmiller2 6y ago
"exaggerates the problems of low-cost/low income places"? You know, the federal poverty level for a single individual is under $13K per year. In which low income / low cost area do you think that's not a problem?
- throwaway0a5e 6y ago
  When you're comparing rates it doesn't matter where the bar is set. That just changes the size of your numbers. For the sake of comparison the threshold just needs to be set somewhere that doesn't result in a huge number of states being crammed at one end of the spectrum. The problem is the flattening of urban and rural within state like others have said. A suburb of NYC may as well be a foreign country compared to a suburb of Buffalo. Of course if you're gonna doll out aid based on the absolute number you should set a sane threshold but that doesn't really matter for the purposes of this discussion.
  - pmiller2 6y ago
    I must be dense. I don't understand what you're saying. Why does the distribution matter? If anything, yes, I agree the thresholds should be set much higher than they are now, and should be dependent on local CoL, but $13K/year is going to be a problem no matter where you live.
    - throwaway0a5e 6y ago
      Because if you set the poverty line so that everyone not in the 1% is poor you'd get a rich state with 98.93% poverty and a poor state with 99.52% poverty or some other asinine result that requires more post-processing to actually make sense of. The closer the rate is set to the real definition of poor (however you define that) is the less adjustment you need to do to know how many people are "actually" poor, you just multiply by the population of the area that has that rate. But like I said, the problem is you can't use one federal number and apply it across areas (be those areas states or subsections of states) with very different economic conditions without adjustment. Trying to do so is like trying to compare salaries across countries without taking into account exchange rates. With the single federal rate you can do some rough comparisons. For example we can compare Ohio, a fairly blue collar, not totally rural but also not urban dominated state, with Massachusetts, a state that has all its stats dominated by the Boston area in order to tease out the difference between what it's like living in middle America. But even than it's kind of limiting because the next obvious question is what are the county poverty rates and that gets real messy and inaccurate real fast. Think of the federal poverty rate like U3 unemployment, better than nothing but not good for much if you really want to understand what's going on
      - pmiller2 6y ago
        Right, but the numbers are artificially low. I don't see how that exaggerates the problems of low COL areas, as I wrote in my initial comment. How does any of this apply to my actual question?
        Kalium 6y ago
        If the cost of living in a place as people actually live is below what a federal poverty formula set in 1963 says it is, then the rate will overreport. If it is above that line, the rate will underreport. In both cases, a number based around the social assumptions of 1963 is not a perfect way to measure what life is actually like for actual people more than fifty years later. Things like household composition and non-cash income affect lived reality too. I hope that answers your question! Personally, I found the report from the Census Bureau and BLS (as per my earlier comment) quite educational for exactly this sort of eminently reasonable concern. But your mileage may vary!
- Kalium 6y ago
  According to the Census Bureau the poverty rate of New Mexico or Mississippi drops by more than three percent when you factor in cost of living, household unit sizes, poverty alleviation programs, and other things. With that in mind, the answer seems to be that in twenty-five states the straightforward calculation based on income exaggerates real poverty. You'll find aggregate numbers, and methodological details, at the link above. I hope that answers your question.

by Kalium 6y ago

md_ 6y ago

Thanks!

deleted 6y ago

[deleted]

pmiller2 6y ago

"exaggerates the problems of low-cost/low income places"? You know, the federal poverty level for a single individual is under $13K per year. In which low income / low cost area do you think that's not a problem?

throwaway0a5e 6y ago
When you're comparing rates it doesn't matter where the bar is set. That just changes the size of your numbers. For the sake of comparison the threshold just needs to be set somewhere that doesn't result in a huge number of states being crammed at one end of the spectrum. The problem is the flattening of urban and rural within state like others have said. A suburb of NYC may as well be a foreign country compared to a suburb of Buffalo. Of course if you're gonna doll out aid based on the absolute number you should set a sane threshold but that doesn't really matter for the purposes of this discussion.
- pmiller2 6y ago
  I must be dense. I don't understand what you're saying. Why does the distribution matter? If anything, yes, I agree the thresholds should be set much higher than they are now, and should be dependent on local CoL, but $13K/year is going to be a problem no matter where you live.
  - throwaway0a5e 6y ago
    Because if you set the poverty line so that everyone not in the 1% is poor you'd get a rich state with 98.93% poverty and a poor state with 99.52% poverty or some other asinine result that requires more post-processing to actually make sense of. The closer the rate is set to the real definition of poor (however you define that) is the less adjustment you need to do to know how many people are "actually" poor, you just multiply by the population of the area that has that rate. But like I said, the problem is you can't use one federal number and apply it across areas (be those areas states or subsections of states) with very different economic conditions without adjustment. Trying to do so is like trying to compare salaries across countries without taking into account exchange rates. With the single federal rate you can do some rough comparisons. For example we can compare Ohio, a fairly blue collar, not totally rural but also not urban dominated state, with Massachusetts, a state that has all its stats dominated by the Boston area in order to tease out the difference between what it's like living in middle America. But even than it's kind of limiting because the next obvious question is what are the county poverty rates and that gets real messy and inaccurate real fast. Think of the federal poverty rate like U3 unemployment, better than nothing but not good for much if you really want to understand what's going on
    - pmiller2 6y ago
      Right, but the numbers are artificially low. I don't see how that exaggerates the problems of low COL areas, as I wrote in my initial comment. How does any of this apply to my actual question?
      - Kalium 6y ago
        If the cost of living in a place as people actually live is below what a federal poverty formula set in 1963 says it is, then the rate will overreport. If it is above that line, the rate will underreport. In both cases, a number based around the social assumptions of 1963 is not a perfect way to measure what life is actually like for actual people more than fifty years later. Things like household composition and non-cash income affect lived reality too. I hope that answers your question! Personally, I found the report from the Census Bureau and BLS (as per my earlier comment) quite educational for exactly this sort of eminently reasonable concern. But your mileage may vary!
Kalium 6y ago
According to the Census Bureau the poverty rate of New Mexico or Mississippi drops by more than three percent when you factor in cost of living, household unit sizes, poverty alleviation programs, and other things. With that in mind, the answer seems to be that in twenty-five states the straightforward calculation based on income exaggerates real poverty. You'll find aggregate numbers, and methodological details, at the link above. I hope that answers your question.