Exploring the use of the public's views to set income poverty thresholds and adjust them over time

Abstract

This study considers how the views of the public at large may be used to define the poverty income level. The basic data for the study come from routine Gallup surveys conducted since the beginning of the post-World War II period that asked representative samples of adults in the United States to estimate the smallest amount of money that a family of four needs to "get along." Additional Gallup surveys undertaken in 1989 established the income corresponding to the poverty level using a similar approach. The author constructs a set of poverty thresholds, covering the post-World War II period, based on the single point-in-time poverty/get-along income relationship in 1989 and the full get-along series. Comparison of this set of thresholds with an alternative poverty series that is consistent with the Federal Government's official poverty measure yields three principal findings: (1) a poverty level consistent with the official measure was a good deal higher than the Gallup-based poverty threshold in the immediate post-World War II period, (2) the income level of the official measure was likely consistent with the public's views about the poverty level at the time when the official measure was introduced, and (3) since the late 1960's and the early 1970's, the income level of the official measure has fallen increasingly below the Gallup-based poverty threshold until 1989 when the official measure was 20 percent below the Gallup series. It is suggested that the two series have diverged over time because the views of the public about poverty level income have responded to increases in real income that have occurred since World War II while the official measure has remained fixed in real terms.