Aggregating Poor and Near-Poor Elderly under Different Resource Definitions

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Abstract
The large number of near-poor relative to poor elderly persons in the United States may be recharacterized as a highprevalence, low-intensity type of poverty. The present study investigates how this characterization is affected by accounting for assets and non-cash transfers in addition to cash income in resources available for current-year consumption. The Foster, Greer, Thorbecke (FGT) poverty index is used to separately and jointly analyze prevalence and intensity of poverty. Estimation is from 1984 Survey of Income and Program Participation data. Adding the annuity value of assets removes many elderly persons from the ranks of the poor and near-poor, while adding noncash transfers moves many elderly persons from poverty into near-poverty. Their combined effect reinforces a highprevalence, low-intensity characterization of poverty. Large total poverty reduction effects are missed by income-only resource definition, and large poverty-intensity reduction effects are missed by prevalence-only aggregation.

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