having no value to the recipients and that it assumed the same demand for subsidized goods and services among program participants as among near-poverty nonparticipants.
We agree with the Census Bureau's use of market values for food stamps and other nonmedical in-kind benefits, primarily on the ground of operational feasibility. The major problem area concerns public housing, for which it is most likely that recipients would not value the benefit as much as an equivalent amount of cash and for which there are difficulties in accurately ascertaining the market value or the recipient value.
The Census Bureau has changed its procedure for estimating rental subsidies several times over the decade to strive for greater accuracy. Yet there is evidence that problems remain. Thus, the Census Bureau's aggregate estimates of housing subsidies are considerably below the subsidy amounts reported as outlays by the U.S. Department of Housing and Urban Development (HUD). For example, Steffick (1993) cites 1990 total outlays of $13 billion but the Census Bureau estimates $9 billion in total subsidies for that year. The distribution of subsidy amounts among families may also be problematic. As an example, although housing costs vary considerably by geographic area, the Census Bureau's estimates distinguish only the four major regions (see Steffick, 1993, on this point). Finally, the Census Bureau is still using data from the 1985 American Housing Survey, which are now quite old. At a minimum, the Census Bureau should reestimate its model with later AHS data. Ideally, more research should be conducted on methods for valuing housing subsidies.
We note that SIPP affords the opportunity to improve the valuation of nonmedical in-kind benefits. SIPP includes more benefits (specifically, LIHEAP, WIC, and School Breakfast) than does the March CPS and provides more accurate reporting because of more frequent interviews. SIPP also ascertains housing costs (rent and utilities) for people in subsidized as well as unsubsidized housing and so provides a much better basis for imputing rental subsidies than does the March CPS, which lacks housing cost data. The Census Bureau is currently developing an in-kind benefit valuation program for SIPP, and we urge that this work move forward.
The issue of how best to treat medical care needs and resources in the poverty measure has bedeviled analysts since the mid-1970s, when rapid growth in the Medicare and Medicaid programs (and in private health insurance) led to a concern that the official measure was overstating the extent of poverty among