the official threshold—by amounts that now bracket the Orshansky multiplier threshold.
Because of problems of data comparability over time and measurement error, one should not make too much of the specific threshold values shown in Table 2-1 (or below). They are illustrative and broadly accurate, and we present them only to emphasize the overall patterns. In this set of comparisons, what is clear is that the relativity in the application of the Orshansky approach, which stems from the large multiplier that includes all other nonfood spending, produces thresholds that mirror changes in real consumption above and beyond price changes.
Ruggles (1990: Table A.5) derived poverty thresholds by using a multiplier approach but applying the multiplier to a poverty standard for housing rather than food. Her foundation for this measure was the fair market rents developed by the U.S. Department of Housing and Urban Development (HUD) for use in determining rent subsidies to eligible families under the Section 8 Housing Assistance Payments Program, established in 1975.
HUD develops fair market rents by analyzing rent distributions in metropolitan areas and nonmetropolitan counties for two-bedroom apartments occupied by recent movers that meet specified quality standards. (The data sources for the rent distributions include the decennial census, the American Housing Survey [AHS], and local area random digit dialing telephone surveys; see Chapter 3.) The Section 8 program subsidizes tenants by making up the difference between a rental amount, which generally cannot exceed the applicable fair market rent, and a percentage of the family's income. Currently, fair market rents are set at the 45th percentile of the rent distribution in each area, and eligible families are expected to contribute 30 percent of their net countable income toward the rent. (Prior to 1983, fair market rents were set at the median or 50th percentile of the distribution, and prior to 1981, families were expected to contribute only 25% of their net countable income toward the rent.)
To calculate poverty thresholds, Ruggles divided the annualized value of the fair market rent for the nation as a whole by the applicable percentage of income: 25 percent, corresponding to a multiplier of 4.00, or 30 percent, corresponding to a multiplier of 3.33; see Table 2-2. Thresholds developed in this manner are not available prior to the initiation of the Section 8 program; for the period 1977-1992, such thresholds have exceeded the official threshold by 45-55 percent.
Weinberg and Lamas (1993) developed a set of poverty thresholds for 1989 by budgeting amounts for both food and housing and applying a multiplier. They took the annual cost of the Thrifty Food Plan, added the 25th percentile value of the distribution of all nonsubsidized rented units from the