Alternative Poverty Measures

Pursuant to a congressional request, GAO reviewed the Slesnick consumption measure, an alternative to the official U.S. government measure of poverty, focusing on: (1) how the Slesnick measure differs from the official measure; (2) the methodology used to test the alternative measure; and (3) the sources of data used in that methodology. GAO noted that: (1) because of inadequate data household consumption, the Slesnick measure used three different data sources to develop a consumption-based measure of poverty; (2) the Slesnick measure yielded a poverty rate of 8.4 percent in 1989, while the official measure of poverty yielded a 12.8-percent rate in 1989; (3) the Slesnick and the official measures of poverty differed regarding the dollar amounts of threshholds, measures of economic well-being, and the use of equivalence scales, cost-of-living indexes, and population data for grouping households; (4) a per capita ratio of expenditures from Personal Consumption Expenditures and Consumer Expenditure Survey data sources was used to test the sensitivity of the Slesnick measure to differences in data sources; (5) the consumption-based measure of poverty generally produced a lower rate than the official poverty measure; and (6) the use of different sources of consumption data affected the size of the differences between the Slesnick and official poverty measures.