Category: Prices and costs

Overview: The Interagency Technical Working Group (ITWG) on Developing a Supplemental Poverty Measure recommended that Supplemental Poverty Measure thresholds be adjusted for price differences across geographic areas. The American Community Survey (ACS) data allows for the first time for the creation of a housing price index. Only the shelter portion of the Supplemental Poverty Measurement thresholds is adjusted using the index. This approach offers one option for calculating cost-of-living differences across regions.

Unit of Analysis: Two-bedroom rental units with complete plumbing and kitchens

Coverage:  358 index values; for each state, a median is estimated for all nonmetropolitan areas (48), for each metropolitan statistical area (MSA) with a population above 100,000 (264), and for a combination of all other metropolitan areas within a state.

Key Data Elements: The BLS, using data from five years of the Consumer Expenditure survey, estimates thresholds for renters, homeowners with mortgages, and homeowners without mortgages.  The index is based on median gross rent for two-bedroom units with complete plumbing and kitchens. Additional estimated indices consider rent at the 33rd percentile and below poverty thresholds.

Form: Index

Timeframe: Currently 2009

Frequency: Annual

Data Source: Derived from the 5-Year American Community Survey data

Access: Public use, available on the SPM Research Files

Potential Uses for Regional Analysis: Provides for cost-of-living comparisons across regions or within states with consideration to metropolitan/non-metropolitan areas.

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