1 Poverty levels for nonfarm families.

Source: U.S. Census Bureau, Current Population Reports, Poverty in the United States,P60-210; and http://www.census.gov/hhes/poverty/histpov/hstpov1.html (accessed 04 January 2001)

http://www.census.gov/hhes/www/poverty.html

*CURRENT POPULATION SURVEY (MARCH ANNUAL DEMOGRAPHIC SURVEY)

Approximately 62,500 housing units were eligible to receive the 1995 Annual Demographic Survey. The basic monthly CPSsample of 60,000 housing units was supplemented by 2,500 housing units which had at least one Hispanic member theprevious November. In addition, members of the Armed Forces, which are excluded from the basic CPS labor force survey,were part of the elibigle population in March. Because of the CPS sample rotation system, approximately one-half of thesample had been interviewed the previous March.

Interviewers used lap-top computers to administer the interview, asking questions as they appear on the screen and directlyentering the responses obtained. With the exception of first and the fifth month-in-sample interviews, when an interviewerusually visited the sample unit, over 90 percent of the interviews were conducted by telephone.

Completed interviews were electronically transmitted to a central processor where the responses were edited for consistency,imputations were made for missing data, and various codes were added. Based on the probability of selection, a weight wasadded to each supplement-responding household and person record so that estimates of the population by state, race, age,sex, and Hispanic origin matched the population projections made by the Bureau of the Census. Since not every person whoprovided labor force information completed the supplement and the supplement was asked of members of the Armed Forces,the supplement weights vary from those used for labor force estimation.

*DEFINITIONS

Poverty definition

Poverty statistics presented in this report are based on adefinition developed by Mollie Orshansky of the Social SecurityAdministration (SSA) in 1964 and revised in 1969 and 1981 byinteragency committees. This definition was established as theofficial definition of poverty for statistical use in allExecutive departments by the Bureau of the Budget (BoB) in 1969(IN CIRCULAR NO. A-46); after BoB became Office of Managementand Budget, this was reconfirmed in Statistical Policy DirectiveNo. 14.

The original poverty index provided a range of income cutoffs orthresholds adjusted by such factors as family size, sex of thefamily head, number of children under 18 years old, and farm-nonfarm residence. At the core of this definition of poverty wasthe economy food plan, the least costly of four nutritionallyadequate food plans designed by the Department of Agriculture. It was determined from the Department of Agriculture's 1955Household Food Consumption Survey that families of three or morepersons spent approximately one-third of their after-tax moneyincome on food; accordingly, poverty thresholds for families ofthree or more persons were set at three times the cost of theeconomy food plan. Different procedures were used to calculatepoverty thresholds for two-person families and persons livingalone in order to compensate for the relatively larger fixedexpenses of these smaller units. For two-person families, thecost of the economy food plan was multiplied by a factor of 3.7(also derived from the 1955 survey). For unrelated individuals(one-person units), no multiplier was used; poverty thresholdswere instead calculated as a fixed proportion of thecorresponding thresholds for two-person units. Annual updates ofthese SSA poverty thresholds were based on price changes of theitems in the economy food plan.

As a result of deliberations of a Federal interagency committeein 1969, the following two modifications to the original SSAdefinition of poverty were adopted: (1) the SSA thresholds fornonfarm families were retained for the base year 1963, but annualadjustments in the levels were based on changes in the ConsumerPrice Index (CPI) rather than on changes in the cost of foods inthe economy food plan; and (2) the farm thresholds were raisedfrom 70 to 85 percent of the corresponding nonfarm levels. Thecombined impact of these two modifications resulted in anincrease in the tabulated totals for 1967 of 360,000 poorfamilies and 1.6 million poor persons.

In 1981 three additional modifications in the poverty definitionrecommended by another interagency committee were adopted forimplementation in the March 1982 CPS as well as the 1980 census:(1) elimination of separate thresholds for farm families, (2)elimination (by averaging) of separate thresholds for female-householder families and "all other" families (earlier termed"male-headed" families) and (3) extension of the detailed povertythreshold matrix to make the largest family size category "ninepersons or more." For further details, see the section, "Changesin the Definition of Poverty," in Current Population Reports,Series P-60, No. 133.

The poverty thresholds are increased each year by the samepercentage as the annual average Consumer Price Index.

For further information on how the poverty thresholds weredeveloped and subsequent changes in them, see Gordon M. Fisher,"The Development and History of the Poverty Thresholds," SocialSecurity Bulletin, Vol. 55 No. 4, Winter 1992, pp. 3-14.

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