We find that more than 90% are not in extreme poverty once we include in-kind transfers

Measurement is a decidedly hard task. An interesting paper that is related to the problem of measurement.

From The Use and Misuse of Income Data and Extreme Poverty in the United States by Bruce D. Meyer, Derek Wu, Victoria R. Mooers, and Carla Medalia. From the Abstract:

Recent research suggests that rates of extreme poverty, commonly defined as living on less than $2/person/day, are high and rising in the United States. We re-examine the rate of extreme poverty by linking 2011 data from the Survey of Income and Program Participation and Current Population Survey, the sources of recent extreme poverty estimates, to administrative tax and program data. Of the 3.6 million non-homeless households with survey-reported cash income below $2/person/day, we find that more than 90% are not in extreme poverty once we include in-kind transfers, replace survey reports of earnings and transfer receipt with administrative records, and account for the ownership of substantial assets. More than half of all misclassified households have incomes from the administrative data above the poverty line, and several of the largest misclassified groups appear to be at least middle class based on measures of material well-being. In contrast, the households kept from extreme poverty by in-kind transfers appear to be among the most materially deprived Americans. Nearly 80% of all misclassified households are initially categorized as extreme poor due to errors or omissions in reports of cash income. Of the households remaining in extreme poverty, 90% consist of a single individual. An implication of the low recent extreme poverty rate is that it cannot be substantially higher now due to welfare reform, as many commentators have claimed.

The distinction between wages income, earned income, reported income and in-kind transfers are a measurement nightmare. The underlying point is a valid one though. Advocates frequently make claims about absolute poverty which are simply unsupportable by any sense of the real world.

I routinely hear advocates on NPR making some outlandish claim or argument based on variations of "x millions in poverty," "y millions going hungry," "z millions not making it at all." There are many who live difficult lives for innumerable reasons. But if we cannot adequately measure the problem, we are challenged to efficiently and effectively solve the problem.

As alluded to in the abstract, the population deemed to be in poverty who are actually just in straightened circumstances have different concerns, issues and root causes, than the bottom 10% of those deemed to be in poverty.

The second group are plagued by a nightmare combination of issues related to mental health, poor personal decision-making, substance abuse and the like. They are not to be excluded for these reasons from our efforts to help them. But the sources of their bad circumstances are both different and much more intractable. It is important to know that.