The Well Being of Families and Children as Measured by Consumption Behavior

Overview

Traditional measures of poverty are based on income: if income is below a given threshold, then the family is determined to be poor. Some economists have suggested that a family's well-being is better measured by their total spending rather than their total income. That is, some families can have a satisfactory standard of living even if they have low current income. This may be due to the fact that the family can support consumption by drawing down assets.

At the same time, some empirical evidence suggests that low-income families with little or no assets are able to maintain consumption patterns that exceed their reported income. One possibility is that these low-income families are establishing credit card debt or borrowing on the equity in their home, perhaps jeopardizing their future financial security. Alternatively, these families may be receiving assistance from family and friends to buffer their low income.

In consultation with leading researchers and analysts on this topic, the NPC has identified a number of high priority areas and identified scholars whom we commissioned to write original research papers. The papers will be presented at a conference to be held in Washington, D.C., May 4-5, 2006. We anticipate 20-30 scholars from universities and think tanks to participate in the final conference, along with interested government agency staff and researchers. The papers undertaken by NPC researchers and the commissioned papers will be presented and discussed.

Agenda and conference papers

Click here for the conference agenda and copies of the commissioned papers.

 

Sponsors and organizers

The project is supported by funds from the U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation.

The research project and conference are organized for the National Poverty Center by University of Michigan faculty members:

Robert Schoeni, Associate Director of the Panel Study of Income Dynamics, and Associate Professor in the Department of Economics and the Gerald R. Ford School of Public Policy.

Sheldon Danziger, Co-director of the NPC and Henry J. Meyer Distinguished University Professor at the Gerald R. Ford School of Public Policy.

Kerwin K. Charles, Emmett Dedmon Visiting Professor, the Harris School of Public Policy, University of Chicago; Associate Professor of Economics and Public Policy, University of Michigan.

Agenda

Click titles to read conference versions of the commissioned papers.

Thursday May 4

9:00-10:00: Continental Breakfast

10:00-10:15: Introductions and Overview of the Conference

10:15-11:55: Session 1
Chair: Rebecca Blank, University of Michigan

10:15-11:05: From Micro to Macro, from Poor to Rich: Consumption and Income in the UK and the US Orazio P. Attanasio, Erich Battistin, and Andrew Leicester
Discussant: Chris Carroll, Johns Hopkins University

11:05-11:55: An Assessment of the Income and Expenses of America's Low-Income Families Using Survey Data from the National Survey of America's Families. Gregory Acs and Austin Nichols
Discussant: Patricia Ruggles, National Academy of Sciences

11:55-1:20: Lunch

1:20-3:00 Session 2
Chair: Donald Oellerich, Department of Health and Human Services, ASPE

1:20-2:10: Income, Consumption, and Well-Being Among Poor Elderly. Kerwin Charles, Sheldon Danziger, Laurie Pounder, Bob Schoeni
Discussant: Susann Rohwedder, RAND Corporation

2:10-3:00: Poverty in the U.S. Based on NAS Recommendations: Income and Expenditures Thesia I. Garner, Kathleen Short
Discussant: Gary Burtless, Brookings Institution

3:00-3:20: Break

3:20-5:00 Session 3
Chair: John Iceland, University of Maryland

3:20-4:10: Studying Consumption with the Panel Study of Income Dynamics: Comparisons with the Consumer Expenditure Survey and an Application to the Intergenerational Transmission of Well-being. Kerwin Charles, Sheldon Danziger, Geng Li, Bob Schoeni
Discussant: Susan Mayer, University of Chicago

4:10-5:00: Assessing Parental Expenditures on Children in Low-Income, Ethnically Diverse and Immigrant Families. Julieta Lugo-Gil and Hirokazu Yoshikawa
Discussant: Ron Haskins, Brookings Institution

5:00-6:00: Reception

Friday May 5

8:00-9:00: Continental Breakfast

9:00-12:00 Session 4
Chair: John Weicher, The Hudson Institute

9:00-9:50: Three Decades of Consumption and Income Poverty. Bruce Meyer and Jim Sullivan
Discussant: Steven Haider, Michigan State University

9:50-10:40: Welfare Reform and Family Expenditures: How are Single Mothers Adapting to the New Welfare and Work Regime? Neeraj Kaushal, Columbia University; Qin Gao, Fordham University; Jane Waldfogel, Columbia University
Discussant: Robert Rector, Heritage Foundation

10:40-11:10: Break

11:10-12:00: The Retirement Consumption Conundrum: Evidence from a Consumption Survey. Jonathan Fisher, David S. Johnson, Joseph Marchand, Timothy M. Smeeding, and Barbara Boyle Torrey
Discussant: Jonathan Skinner, Dartmouth College

12:00-1:20: Lunch

1:20-3:00: Session 5
Chair: Sheldon Danziger, University of Michigan

2:10-3:00: How Well Can We Measure the Well-Being of the Poor Using Food Expenditure? Tom DeLeire and Helen Levy
Discussant: Sanders Korenman, Baruch College

2:10-3:00: Over-Spending: Who, How, and Why? Kerwin Charles, Geng Li, and Bob Schoeni
Discussant: Mel Stephens, Carnegie Mellon University

3:00-3:30: Closing comments and Discussion
Robert Schoeni, University of Michigan

Additional Details

May 2006 Conference

By July 2005, the NPC had identified a number of high priority areas and identified scholars whom we commissioned to write original research papers. The papers were presented at a conference held in Washington, D.C., May 4-5, 2006.

Over 30 scholars from universities and think tanks participated in the final conference, along with interested government agency staff and researchers. The papers undertaken by NPC researchers along with the commissioned papers were presented and discussed. Conference details and presented papers are available here.

November 2004 NPC workshop

In November 2004, the NPC sponsored a 1 day workshop in Washington, D.C., that brought together the nation's leading experts on this topic, as well as the experts from each of the three data sets, along with agency staff from ASPE, Census, the BLS and other agencies, to begin to develop a consensus about what we know and what we need to know about these issues.

The goal of the pre-conference was to identify broad topics that need to be explored by the research and policy communities. To that end, the NPC commissioned memos from several scholars, who presented their memos to the pre-conference participants for open discussion and assessment. The memos (see below) describe various gaps in our knowledge about consumption related issues.


Memos prepared for November 5, 2004 workshop

Inequality, Poverty and their evolution in the US: Consumption and Income Information in the Consumer Expenditure Survey. Orazio Attanasio, Erich Battistin and Andrew Leicester.

Consumption Among Low-Income Families: Policy Concerns. Timothy M. Smeeding, Maxwell School, Syracuse University.

Using Consumption Data to Assess Income Sharing Among Cohabiting Couples. Douglas J. Besharov and Gordon W. Green, University of Maryland and the American Enterprise Institute.

Potential Policy-Related Uses of Measures of Consumption among Low-Income Populations. Susan E. Mayer, University of Chicago, Harris School.

Consumption and the Poor: What We Know and What We Can Learn. Bruce D. Meyer University of Chicago and NBER. James X. Sullivan, University of Notre Dame.