The official definition of poverty dates back more than 30 years to the early 1960's. There is general agreement that the underlying concepts of the current measure do not adequately reflect reality any longer. The Committee on National Statistics of the National Research Council investigated the underlying concepts and measurement methods in depth. This led to the release of a report containing a set of recommendations about envisioned changes to the current poverty definition. Proposed changes focused on three major areas: the poverty thresholds, the measurement of resources, and data sources.

The panel recommended a resource measure that represents disposable money and near-money resources. This paper deals with the measurement of a specific type of resource, the monetary benefit arising from living in public or subsidized housing. We will examine various methods of accounting for housing subsidies in a new measure of poverty using data from the 1991 Survey of Income and Program Participation (SIPP).

The Census Bureau currently estimates housing subsidies in the Current Population Survey to provide an estimate of the subsidy effect on poverty. We will begin by adapting this measure to SIPP data. We will then explore alternatives to this measure. Alternatives include various methods of determining the recipiency unit and of simulating subsidy amounts. We then examine the effect on poverty rates using theses methods. Mean and aggregate subsidy amounts are compared for the purpose of selecting the 'best' method.