Valuing Housing Subsidies: A Revised Method for Quantifying Benefits in a New Measure of Poverty

Indianapolis, Indiana This paper reports the results of research and analysis undertaken by Census Bureau staff. It has undergone a Census Bureau review more limited in scope than that given to official Census Bureau publications. This report is released to inform interested parties of ongoing research and to encourage discussion of work in progress. Abstract According to the recommendations of the National Academy of Science's Panel on Poverty and Family Assistance, a new measure of poverty should include a value of noncash benefits in the estimation of family resources. This paper addresses the issue of valuing one such non-cash benefit, housing subsidies. This analysis devises a revised method for valuing subsidies using data from the American Housing Survey (AHS) and the Current Population Survey (CPS). The present paper diverges from previous attempts to measure housing subsidies in two important ways. First is the inclusion of geographic location as a key factor for specifying differences in housing prices. Second is the use of a statistical match of families in the AHS to families in the CPS, the official source of poverty statistics, which allow values of subsidies to be allocated across the two surveys in a method more in line with a missing data approach. The analysis then compares estimated subsidies using this new method to subsidies under the current one. Finally, the paper discusses the poverty rates and the distribution of the poverty population when the housing subsidies are taken into account.