On the Relative Weil-Being of the Nonmetropolitan Poor: An Examination of Alternate Definitions of Poverty during the 1990s

Abstract

Using Foster-Greer-Thorbecke poverty indices, this paper shows that although the incidence of poverty was higher in nonmetropolitan than metropolitan areas throughout the 1990s, the poverty-gap index was only statistically significantly higher in nonmetropolitan areas in six of the 10 years, and the squared poverty-gap index was worse in only three years. This paper also provides design-corrected standard errors for the indices, which result in more than doubling the uncorrected estimates. An examination of the ratio of the poverty-gap to the head count index establishes that the average shortfall of the poor as a fraction of the poverty line was worse in the metropolitan areas during all 10 years of the 1990s. Similarly, the distribution of income divided by the poverty line indicates that disproportionately more of the nonmetropolitan poor subsisted on incomes near the poverty line, whereas the metropolitan poor were relatively more likely to be living in extreme poverty.