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Measuring the Well-Being of the Poor Using Income and Consumption

Bruce D. Meyer and James X. Sullivan
The Journal of Human Resources
Vol. 38, Special Issue on Income Volatility and Implications for Food Assistance Programs (2003), pp. 1180-1220
DOI: 10.2307/3558985
Stable URL: http://www.jstor.org/stable/3558985
Page Count: 41
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Measuring the Well-Being of the Poor Using Income and Consumption
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Abstract

We evaluate consumption and income measures of the material well-being of the poor. We begin with conceptual and pragmatic reasons that favor income or consumption. Then, we empirically examine the quality of standard data by studying measurement error and under-reporting, and by comparing microdata from standard surveys to administrative microdata and aggregates. We also compare low reports of income and consumption to other measures of hardship and well-being. The closer link between consumption and well-being and its better measurement favors the use of consumption when setting benefits and evaluating transfer programs. However, income retains its convenience for determining program eligibility.

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