Defining the ‘Resource Unit’ for Poverty Measurement in Complex Contemporary Households: It’s Complicated

Abstract

Determining whether a household is ‘in poverty,’ requires identifying a resource unit, typically consisting of individuals who both co-reside and pool resources. High levels of family complexity and fluidity in living arrangements among contemporary American families, particularly those that include children, have complicated this task. We leverage novel survey data from Wisconsin to examine the implications of a range of alternative criteria for identifying the resource unit used to measure poverty. We further consider the extent to which unit members, under alternative criteria, exchange food-related resources both within and outside of the unit. Our results reveal inconsistencies between alternative measures of the resource unit and those used to define the resource unit for the Official Poverty Measure (OPM) and Supplemental Poverty Measure (SPM) in the United States, and we find that the SPM unit is generally more consistent than the OPM unit with alternative measures of the resource unit. In addition, we find substantial levels of food resource exchanges among adults who are both inside and outside the resource unit. Together, these findings demonstrate the challenge of appropriately defining the resource unit for measuring poverty and suggest that both the OPM and SPM may not fully account for the availability, amount, or composition of resources for many households.