Measuring Poverty
The statistics presented in this paper are based on the official definition of poverty in the United States, which reflects the fraction of persons (or families) with incomes below an absolute threshold.The poverty thresholds were developed
in 1963–1964 by Mollie Orshansky, an economist at the Social Security Administration, and were adopted in August 1969 (Fisher, 1992).
They were constructed by first estimating the cost of the Department of Agriculture’s “economy food plan” for different family sizes.
Tabulations from the 1955 Household Food Consumption Survey showed that on average, one-third of family after-tax income was spent on food, so the estimated food costs were then multiplied by three to construct the poverty thresholds for households of different sizes (a higher multiplier was used for families with less than three persons to reflect the high fixed costs of housing).
These thresholds have been adjusted each year to reflect changes in the cost of living using the Consumer Price Index (CPI), but otherwise, the official poverty