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This paper examines the impact of changing the range of expenditures which serve as the basis for the Supplemental Poverty Measure (SPM) poverty thresholds, and expanding the estimation sample upon which the thresholds are based. Currently, the thresholds are based on the 30-36th percentile range of expenditures for food, clothing, shelter, and utilities (FCSU) incurred by consumer units with two children. This is in contrast to a percentage of the median of FCSU expenditures recommended by the National Academy of Sciences Panel in 1995 (Citro and Michael 1995). Moving back to the median has advantages, including that thresholds and resources would be more consistently defined. Fewer expenditures at the median of the FCSU distribution must be augmented to account for the value of in-kind benefits than at the lower end of the distribution. Further, if in the future, health care needs were to be accounted for in the SPM thresholds, spending at the median would be more representative of spending on private health insurance compared to the lower end of the FCSU distribution which is more likely to either have no health insurance or public insurance for which they do not pay. Additionally, this paper explores the possibility of expanding the estimation sample, whose expenditures underlie the SPM thresholds, from consumer units with exactly two children to either consumer units with one or more children or to all consumer units. Both options would result in larger sample sizes and would reflect the current population distribution more fully. Thresholds based on changing the range of expenditures and estimation sample are produced along with poverty statistics. We recommend that future SPM thresholds be based on a percentage of median FCSU expenditures and that the estimation sample be expanded to either consumer units with children or all consumer units, regardless of the presence of children.
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