Journals of Gerontology Series B: Psychological Sciences and Social Sciences, Vol 51, Issue 4 S209-S216, Copyright © 1996 by The Gerontological Society of America
Aggregating poor and near-poor elderly under different resource definitions
MS Rendall
Department of Consumer Economics and Housing, Cornell University, Ithaca, NY 14853-4401, USA. msr5@cornell.edu
The large number of near-poor relative to poor elderly persons in the
United States may be recharacterized as a high-prevalence, low- intensity
type of poverty. The present study investigates how this characterization
is affected by accounting for assets and non-cash transfers in addition to
cash income in resources available for current- year consumption. The
Foster, Greer, Thorbecke (FGT) poverty index is used to separately and
jointly analyze prevalence and intensity of poverty. Estimation is from
1984 Survey of Income and Program Participation data. Adding the annuity
value of assets removes many elderly persons from the ranks of the poor and
near-poor, while adding non-cash transfers moves many elderly persons from
poverty into near- poverty. Their combined effect reinforces a
high-prevalence, low- intensity characterization of poverty. Large total
poverty reduction effects are missed by income-only resource definition,
and large poverty-intensity reduction effects are missed by prevalence-only
aggregation.
