10. Personal assessments of minimum income and expenses: What do they tell us about ‘minimum living’ thresholds and equivalence scales?

Abstract

Subjective minimum income (MIQ) and minimum spending (MSQ) are the study focus. Basic Needs Module (1995) data from the U.S. Survey of Income and Program Participation are analyzed. A regression intersection approach is used to estimate household thresholds. MIQ thresholds are higher than MSQ thresholds. Both are higher than U.S. official poverty thresholds, and thresholds based on a National Academy of Sciences (NAS) methodology. Subjective threshold-based equivalence scales imply greater economies of scale than those in the other two measures but are similar to behavioral scales. This finding suggests that families make trade-offs to meet their minimum needs.

Citation

Garner, T.I. and Short, K.S. (2003), "10. Personal assessments of minimum income and expenses: What do they tell us about ‘minimum living’ thresholds and equivalence scales?", Inequality, Welfare and Poverty: Theory and Measurement (Research on Economic Inequality, Vol. 9), Emerald Group Publishing Limited, Leeds, pp. 191-243. https://doi.org/10.1016/S1049-2585(03)09011-2