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Tuesday, March 28, 2006

Poor Measurement of Poverty Raises Concerns

The Center on Budget and Policy Priorities has concerns about the limited set of poverty measures the Bureau of Census is considering as replacements for existing measures of poverty. Here are sections of the introduction and conclusion from the report issued today:

Poor Measurement: New Census Report On Measuring Poverty Raises Concerns, by Jared Bernstein and Arloc Sherman, CBPP: On February 14, the Bureau of the Census released its latest report on alternative measures of poverty. ... The Census Bureau has consistently produced important and insightful work in this area, carrying on the mission set forth by a 1995 National Academy of Sciences (NAS) report, Measuring Poverty: A New Approach. The NAS report has been widely viewed in the research community as the leading blueprint for future improvements in measuring poverty.

The latest Census release, however, departs in some respects from this tradition. Unlike past reports in recent years, this release is limited to a set of new measures that are flawed. ... This is of particular concern because the alternative measures ... all incorporate features that both the NAS panel and past Census reports warned were faulty and that reduce the poverty rate substantially. ...

The cumulative effect of the changes in poverty measurement that are presented in the new report is to lower the poverty rate ... by 4.4 percentage points, or more than one-third, to 8.3 percent, from 12.7 percent ... By contrast, the more balanced and complete approach ... represented by the NAS-guided estimates included in last yearâ??s Census analysis resulted in a range of estimates that were between 0.1 percentage points and 2.0 percentage points higher than the official measure...

The Census Bureau says its new report is meant to provide â??a more complete measure of economic well-being,â? but ... by not following some of the key recommendations made by the National Academy of Sciences regarding improved poverty measurement ... and by not including or discussing the NAS-guided measures of poverty, the new report presents an overly positive view of the extent of poverty in America. ...

There's much more on this issue in the report. One thing we should avoid to the extent that we possibly can is the politicization of our economic statistics. I have always trusted that the people producing the statistics do their utmost to produce an unbiased picture of the economy, an independent view free of political bias. Anything, real or perceived, that undermines the faith we have in those statistics would be a huge step backward for those interested in learning how the economy operates and how policy interacts with the economy's operation, or for anyone wishing to view the economy through an unbiased statistical lens.

    Posted by on Tuesday, March 28, 2006 at 03:11 PM in Economics, Income Distribution, Politics | Permalink  TrackBack (0)  Comments (5)


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