Adjusting Poverty Thresholds Based on Differences in Housing Cost: Application of American Community Survey

Alemayehu Bishaw, U.S. Census Bureau

The National Academy of Science's Panel on Poverty and Family Assistance recommended adjusting the current family poverty thresholds to reflect geographic differences in housing costs. To explore this recommendation, this paper uses the median gross monthly housing cost (renter's occupied)data, for metro and non-metro areas from the 2007 American Community Survey (ACS) to develop specific indicies as a measure of geographic cost of living differences. This paper applies these indicies to the current poverty thresholds and re-evaluates the poverty status of individuals and families. It also compares similar indicies developed using data from other sources to observe the stability/consistency of the variations among the areas. The paper concludes with a discussion of the availability and dependabilty of the ACS housing data to make such comparisons between states and among smaller geographic areas.