Material and Financial Hardship and Income-Based Poverty Measures in the USA

Abstract

Individuals and families may encounter difficulty making ends meet on many dimensions and there are a large number of measures designed to identify this group. In general, there is agreement that all of the approaches capture different pieces of the puzzle, while no single indicator can yield a complete picture. In an attempt to understand this multidimensional aspect of poverty, several measures are examined in this article: the official US poverty measure, a relative poverty measure, an experimental measure following recommendations of the US National Academy of Sciences, an index of material hardship, a measure of household debt, and responses to a question about inability to meet expenses. This study uses the 1996 panel of the Survey of Income and Program Participation (SIPP). The SIPP is a longitudinal survey that allows us to examine all of these various indicators for the same people over the period from 1996 to 1998. The study uses regression analysis to assess the relationship between and among the various indicators of economic hardship.