Why the official poverty rate might be misleading

See Hardly Anyone Wants to Admit America Is Beating Poverty: The White House tells the truth, but partisans on both sides are wedded to the idea of failure by Bruce D. Meyer and James X. Sullivan. Mr. Meyer is a professor of public policy at the University of Chicago and Mr. Sullivan is a professor of economics at the University of Notre Dame. Excerpts:

"Why has this progress been ignored for so long? A key reason is that our main measuring stick for assessing the effect of government programs, the “official poverty measure,” indicates very little improvement since the early 1970s. But this measure is misleading for three reasons.

First, the official income measure does not count in-kind benefits, like the Supplemental Nutrition Assistance Program (food stamps) and housing benefits, or tax benefits, like the earned-income tax credit, which allocated $65 billion to low income workers last year. Over the past 40 years America’s safety net has shifted substantially toward programs such as these and away from traditional cash-transfer ones. Excluding them misses the impact of some of the most successful antipoverty tools.

"Second, the official poverty measure relies on incomplete survey data. Americans are less willing today to take the time to respond accurately to government interviewers, probably for the same reasons that fewer than 1 in 10 answers opinion pollsters. In recent years the official poverty survey registered only half of the cash welfare the government paid out.

Third, the official measure accounts for inflation using the Consumer Price Index for all Urban Consumers, or CPI-U, a benchmark that does not accurately reflect the influence of new consumer products, changes in the quality of goods, or the shift to low-cost stores. While such errors in accounting for inflation have only a small effect on changes from one year to the next, they accumulate over decades and substantially alter long-term trends."

"our work measures poverty based on consumption: what food, housing, transportation and other goods and services people are able to purchase. This approach, which captures the effect of noncash programs and accounts for the known bias in the CPI-U, demonstrates clearly that there is much less material deprivation than there was decades ago."

"the poorest 20% of Americans live as the middle class did a generation ago as measured by the square footage of their homes, the number of rooms per person, and the presence of air conditioning, dishwashers and other amenities."