The 1995 National Academy of Science's Panel on Poverty and Family Assistance (NAS Panel) recommended that when measuring poverty, the definition of family resources for comparison with the appropriate poverty thresholds should be disposable money and near-money income. The NAS Panel specifically recommended that gross money income (the current income concept) be adjusted by adding the value of near-money nonmedical in-kind benefits and subtracting taxes, out-of-pocket medical care expenses, child care costs, work-related transportation and miscellaneous expenses and child support payments.

For the past ten years, the Census Bureau has published estimates of poverty based on the NAS Panel recommendations. This paper will describe the methodologies currently used by the Census Bureau to estimate the value of near-money nonmedical in-kind benefits in order to add this value to the resource estimate used in experimental poverty measures and review the literature, alternatives and issues surrounding each approach. Where appropriate, the paper will recommend a methodology to be used in the resource calculation for a modernized poverty measure. The paper will also provide data to illustrate the impact of these methodological alternatives on the overall poverty rate and the poverty rate for significant subgroups.