The Census Bureau, in creating the S.P.M., corrected these failings, and it also took a more comprehensive view of what types of outlays are necessary for a decent life. Rather than basing everything on food, it included clothing, shelter (rent or mortgage payments), utilities, medical expenses, and child care. And, recognizing that poverty is partly relative, it tied the new poverty threshold to the expenditures of a family that is a third of the way up the income distribution.
By recognizing non-market sources of income, the new poverty measure increases the estimated resources of the poor. In taking account of things like rent and medical expenses, it broadens the concept of the household budget. As far as the poverty rate goes, these adjustments work in opposite directions: the increased measure of incomes reduces the poverty rate; the acknowledgement that more must be spent to secure life’s essentials increases it. When the Census Bureau compared its new poverty metric to its old one, it found that the S.P.M. gave a slightly higher rate for 2012: sixteen per cent, compared to fifteen per cent for the O.P.M.