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Date:         Mon, 14 Dec 1992 16:15:23 -0400
From:         The Integral Differential <DEMON@DESIRE.WRIGHT.EDU>
Subject:      Re: Home ownership among the poor es
Comments: To: POLITICS@OHSTVMA.ACS.OHIO-STATE.EDU

>I don't have any numbers either (if anybody does please post them), but
>do recall a statement that most of the home-owning poor are located in
>rural areas (no surprise there), and that most of the houses they own
>are considered substandard and worth very little.

        Here are some stats from _American Almanac_, table 726 (page 460).

Definition | Description                        | % below poverty level
-----------------------------------------------------------------------------
           |----Income Before Taxes-------------|
  1        | Money income excl. cap gains (curr)| 13.5
  2        | --less gov. money transfers        | 20.5
  3        | --plus cap. gains                  | 20.4
  4        | --plus health insurance supplements| 19.9
           |   to wage or salary income         |
           |----Income After Taxes--------------|
  5        | --less SS payroll taxes            | 20.9
  6        | --less Fed. income taxes (excl EIC)| 21.1
  7        | --plus EIC (earned income credits) | 20.6
  8        | --less state income taxes          | 20.8
  9        | --plus nonmeans-tested gov cash trn| 14.7
 10        | --plus " gov noncash transfers     | 14.3
 11        | --plus means-tested gov cash trans | 13.2
 12        | --plus " gov noncash transfers     | 11.0
 13        | --plus net imputed return on       |  9.8
           |  equity in own home                |
-----------------------------------------------------------------------------

        So we might infer that including the equity value of homes reduces the
poverty rate by 1.2%.
        Defintion 1 is the current defintion of "poverty".
        Note that method 9 "nonmeans-tested" government cash transfers produces
a whopping reduction in the poverty rate.

        Here's another intersting table to go along with it:

        Money income of households--% distribution by quintile and index of
income concentration, by definition of income: 1990

Definition | Description                | Aggregate share of income   | Median
           |                            | 1st | 2nd | 3rd | 4th | 5th | ($)
-------------------------------------------------------------------------------
           |----Income before taxes-----|
  1        |Money income excl cap gains | 3.9 | 9.6 | 16.0| 24.1| 46.4| 29,943
           | (current measure)          |
  2        |--less gov. money transfers | 1.2 | 8.3 | 15.7| 25.0| 49.7| 27,283
  3        |--plus capital gains        | 1.2 | 8.1 | 15.4| 24.5| 50.9| 27,437
  4        |--plus health insurance     | 1.1 | 7.9 | 15.5| 24.7| 50.7| 28,779
           |  supplements to wage/salary|
           |----Income after taxes------|
  5        |--less SS payroll taxes     | 1.1 | 7.9 | 15.4| 24.5| 51.1| 26,963
  6        |--less Fed income taxes     | 1.3 | 8.5 | 16.1| 25.2| 48.8| 24,673
           | (excluding EIC)            |
  7        |--plus EIC                  | 1.3 | 8.6 | 16.1| 25.2| 48.7| 24,713
  8        |--less state income taxes   | 1.4 | 8.9 | 16.4| 25.2| 48.1| 23,947
  9        |--plus nonmeans-tested gov. | 3.7 | 10.4| 16.6| 24.2| 45.1| 26,379
           | cash transfers             |
 10        |--plus nonmeans,noncash xfer| 3.9 | 10.8| 16.7| 24.2| 44.3| 27,328
 11        |--plus means-test cash xfers| 4.6 | 10.9| 16.6| 24.0| 43.9| 27,442
 12        |--plus means, noncash xfers | 5.1 | 11.1| 16.5| 23.8| 43.5| 27,720
 13        |--plus net inputed equity   | 5.2 | 11.1| 16.6| 23.6| 43.5| 29,615
-------------------------------------------------------------------------------

        It's interesting that EIC appears to be a direct redistribution from
the highest quintile to--the second lowest.  Someone missed the target there,
eh?
        Government money transfers change the aggregate income drastically,
with nonmeans-tested cash transfers changing the share by 2.3%, once again at
the expense of the highest quintile.

        More than a little support for the supposition that non-wage/salary
income distorts the poverty picture.  Home equity doesn't change income share
as much as the poverty rate.

>Here in North Carolina, where we have a whole lot of substandard
>housing, poverty activists often start projects designed to bring these
>places up to a more livable condition (indoor plumbing, insulation,
>storm windows and the like).
>Peter

        Saw a TV show about that.  Nice community effort.

Brett'
Comments: Gated by NETNEWS@AUVM.AMERICAN.EDU