Definition of Poverty in the IPUMS Samples

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Poverty data in the IPUMS are based on a definition established by the Social Security Administration in 1964 and subsequently modified by Federal interagency committees in 1969 and 1980. The Office of Management and Budget's (OMB) Directive 14 prescribes this definition as the official poverty measure for federal agencies to use in their statistical work.

At the core of this definition was the 1961 economy food plan, the least costly of four nutritionally adequate food plans designed by the Department of Agriculture. It was determined from the Agriculture Department's 1955 survey of food consumption that families of three or more persons spend approximately one-third of their income on food; hence, the poverty level for these families was set at three times the cost of the economy food plan. For smaller families and persons living alone, the cost of the economy food plan was multiplied by factors that were slightly higher to compensate for the relatively larger fixed expenses for these smaller households. For a more thorough description of how poverty thresholds were created and changed over time, see Gordon M. Fisher's The Development and History of Poverty Thresholds, available here.

The income cutoffs used to determine the poverty status of families and unrelated individuals include a set of 48 thresholds arranged in a two-dimensional matrix consisting of family size (from one person to nine or more persons) cross-classified by presence and number of family members under 18 years old (from no children present to eight or more children present). Unrelated individuals and two-person families were further differentiated by age of the householder (under 65 years old and 65 years old and over). The total income of each family or unrelated individual in the sample was tested against the appropriate poverty threshold to determine the poverty status of that family or unrelated individual.

The federally established poverty thresholds are revised annually to allow for changes in the cost of living as reflected in the Consumer Price Index (CPI-U). The IPUMS relies on the poverty matrix from 1999, making necessary adjustments to other years' data to account for inflation. For each year, IPUMS multiplies total family income (FTOTINC) by the following factors and then uses the resulting adjusted total family income to calcuate poverty status:

Year 1949 1959 1969 1979 1989 1999 2000 2001 2002 2003 2004 2005
Multiplier 7.000 5.725 4.540 2.314 1.344 1.000 0.964 0.941 0.926 0.905 0.882 0.853
Year 2006 2007 2008 2009 2010 2011 2012
Multiplier 0.826 0.804 0.773 0.777 0.764 0.741 0.726

The poverty thresholds are the same for all parts of the country; they are not adjusted for regional, state, or local variations in the cost of living. For a detailed discussion of the poverty definition, see U.S. Census Bureau, Current Population Reports, Series P-60, No. 210, Poverty in the United States: 1999.

Poverty Thresholds by Size of Family and Number of Children Under 18 Years, 1999 dollars (Average of the 12 Monthly Values)

Number of people Number of related children
None One Two Three Four Five Six Seven Eight plus
One person under 65 years $8,667                
One person, 65 years or older 7,990                
Two people, RP under 65 years 11,156 $11,483              
Two people, RP 65 years or older 10,070 11,440              
Three people 13,032 13,410 $13,423            
Four people 17,184 17,465 16,895 $16,954          
Five people 20,723 21,024 20,380 19,882 $19,578        
Six people 23,835 23,930 23,436 22,964 22,261 $21,845      
Seven people 27,425 27,596 27,006 26,595 25,828 24,934 $23,953    
Eight people 30,673 30,944 30,387 29,899 29,206 28,327 27,412 $27,180  
Nine or more people 36,897 37,076 36,583 36,169 35,489 34,554 33,708 33,499 $32,208

Source: U.S. Census Bureau, Demographic Surveys Division, Continuous Measurement Office.