The Concept and Measurement of Asset Poverty: Levels, Trends and Composition for the U. S., 1983-2001

Asset poverty measures the extent to which American households have a stock of assets which is sufficient to sustain a basic needs level of consumption during temporary hard times. We would note that this concept of poverty, based on only the extent of asset-holdings, does not take into account the income level of the household; the question is: Do the assets held by the household enable it to live at a minimum level of consumption for a temporary period, should other source of income—e.g., earnings—be unavailable during this period. As such, this measure complements standard measures of income poverty. We note that income poverty measures identify as poor households whose annual income fails to support some socially determined minimum level of consumption, abstracting from the household’s assets; our asset poverty measure analogously identifies the poor as those households whose wealth or assets are insufficient to enable them to live at this same minimum level, abstracting from the income available to the family.