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Friday, September 09, 2005

What Are Poverty Statistics Telling Us? (Why Oh Why Can't The AEI Read Brad DeLong Edition)

The New York Times has an op-ed piece from Nicholas Eberstadt of the AEI telling us how rotten the poverty statistics are in an attempt to undermine the bad news contained within the numbers.  The commentary itself is not worth presenting here beyond the lead, but the response of Brad DeLong to similar claims in a recent Washington Post article is.  Here’s the lead to the op-ed by Nicholas Eberstadt in the NY Times:

Broken Yardstick, by Nicholas Eberstadt, New York Times:  The most widely quoted federal statistic on deprivation and need in modern America is the "poverty rate" ... According to the latest poverty rate estimates … poverty rates for American families and children were likewise higher last year than three decades earlier. … So why did that poverty rate report end up mostly buried deep inside daily papers? Maybe because many news editors, like policymakers in Washington, know the dirty little secret about the poverty rate: it just isn't any good. Truth be told, the official poverty rate not only fails to calculate trends in impoverishment with any precision, it even gets the direction wrong.

Truth be told indeed.  Here’s Brad DeLong on similar claims made recently in the Washington Post by Jonathan Weisman:

Why Oh Why Can't We Have a Better Press Corps? (Don't Believe Jonathan Weisman Department), Brad Delong: Today the Census Bureau reports:

...There were 37.0 million people in poverty (12.7 percent) in 2004, up from 35.9 million (12.5 percent) in 2003.... The Midwest was the only region to show an increase in their poverty rate.... The South continued to have the highest poverty rate...The percentage of the nation’s population without health insurance coverage remained unchanged ... The percentage of people covered by employment-based health insurance declined...

Yesterday in the Washington Post's Jonathan Weisman told his readers that they shouldn't believe the Census Bureau:

Measuring the Economy May Not Be as Simple as 1, 2, 3: The Census Bureau tomorrow will release the latest statistics on poverty in the United States, the income level of an average household and the number of Americans still lacking health insurance. Don't believe the numbers.

What reasons does Weisman give to support the lead of his article--to support his warning that we should not believe the numbers in today's report?

… 6. Successive White Houses have stuck with the simple to calculate and interpret Orshansky poverty measure rather than move to a more accurate but less transparent measure.

… 9. "Since poverty levels are not adjusted for regional costs of living, the working poor in expensive urban centers like Washington are routinely excluded from federal programs because their income lifts them above the official poverty line."

…Weisman's reason (6) is a reason to report and consider a range of different poverty-level estimates and concepts, and to be cautious in interpreting reported levels of poverty. But it is not a reason to dismiss the trends and movements in poverty over time that the Census Bureau reports...  Only reason (9) is truly cogent in the way that Weisman claims: differences in regional and local costs of living do make comparisions of regional and local poverty estimates unreliable, and do channel less federal poverty-support money to people living in high-cost areas. The conclusion we should draw? Don't believe Jonathan Weisman. When Weisman says, "Don't believe the numbers" the Census Bureau released today on "poverty... income... and the number of Americans still lacking health insurance," he is not playing it straight. The numbers are quite good. The biases in their levels are relatively small. And they are accurate indicators of changes, trends, and patterns.

The conclusion we should draw?  Don’t believe Nicholas Eberstadt when he tells us not to believe the poverty statistics.

    Posted by on Friday, September 9, 2005 at 10:53 AM in Economics, Income Distribution | Permalink  TrackBack (0)  Comments (13)


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