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ERIC Number: ED141464
Record Type: Non-Journal
Publication Date: 1977-Feb-10
Reference Count: N/A
Wealth and the Accounting Period in the Measurement of Means. The Measure of Poverty, Technical Paper VI.
Steuerle, Eugene; McClung, Nelson
This technical study is concerned with both the statistical and policy effects of alternative definitions of poverty which result when the definition of means is altered by varying the time period (accounting period) over which income is measured or by including in the measure of means not only realized income, but also unrealized income and wealth itself. The first part of the study examines how various accounting periods and wealth measures of means affect counts of poverty and determine eligibility for assistance programs. The distribution of poverty across socioeconomic classes, as well as transits into and out of poverty under various definitions, is studied. The second part of the study examines the application of means measurements in existing income-conditionined public income transfer programs. The failure of current eligibility rules to count potential income, and the inconsistent use of various asset tests and accounting periods are noted. It is concluded that counts of the poverty population depend substantially upon the length of the accounting period and the extent to which net worth is considered available as means with which to meet consumption expenses during a period. The screening effects obtained by lengthening the accounting period are often similar to those obtained by adding some fraction of net worth to income in measuring means. Thus there are serious equity considerations in choosing the length of the accounting period and the treatment of net worth in measures of means because the share of total welfare going to various groups depends upon these two factors. Existing transfer programs, adopted in piecemeal fashion, have not made explicit their choice among various goals. These programs have adopted conflicting, confusing, and inequitable criteria for eligibility. (Author/AM)
Descriptors: Definitions, Income, Low Income, Policy Formation, Poverty, Poverty Programs, Statistical Data
Office of the Assistant Secretary for Planning and Evaluation, Department of Health, Education and Welfare, 200 Independence Avenue, S.W., Room 443D-South Portal Building, Washington, D.C. 20201
Publication Type: Reports - Research
Education Level: N/A
Authoring Institution: Department of Health, Education, and Welfare, Washington, DC. Office of the Assistant Secretary for Planning and Evaluation.