BLS WORKING PAPERS 

 U.S. Department of Labor 

U.S. Bureau of Labor Statistics

Office of Prices and Living Conditions 

Note on Standard Errors and Other Relevant Statistics of Experimental Poverty

Thresholds Produced at the Bureau of Labor Statistics: 2006 to 2008

Thesia I Garner, U.S. Bureau of Labor Statistics

Working Paper 436

March 2010

All views expressed in this paper are those of the authors and do not necessarily reflect the views or policies of the

U.S. Bureau of Labor Statistics.
1 

NOTE

STANDARD ERRORS AND OTHER RELEVANT STATISTICS OF EXPERIMENTAL POVERTY THRESHOLDS

PRODUCED AT THE BUREAU OF LABOR STATISTICS: 2006 TO 2008

Thesia I. Garner

Senior Research Economist

Division of Price and Index Number Research

Bureau of Labor Statistics (BLS)

Washington, DC 20212

202 691 6576

Garner.thesia@bls.gov

March 9, 2010

In this note I provide results from ongoing research at the Bureau of Labor Statistics on experimental poverty thresholds. 

The purpose of this note is to present the standard errors of National Academy of Sciences (NAS)-based thresholds 

based on food, clothing, shelter, and utilities (FCSU), and also those based on FCSU items plus medical care (FCSUM). For 

both sets of thresholds, mortgage principal payments are included in the shelter expenditures of homeowners with 

mortgages. 

Thresholds are presented for reference families that consist of two related adults and two children. The methodology 

used for the 2008 thresholds was applied throughout the study. The 2008 thresholds match those on the Census Bureau 

website.1

 However, the estimated thresholds for 2006 and 2007 differ from those on the Census Bureau website due to 

changes in the methods to produce the thresholds, introduced in the fall of 2009.2

 See Garner and Short 2010) for a 

description of the procedures used to produce the thresholds.3

Standard errors are produced using the method of balanced repeated replications with 44 replicates created by the BLS 

Division of Consumer Expenditure Surveys. The full sample of data is used to produce the thresholds presented below, 

while the 44 replicates are used to produce the standard errors.

These results reveal that the standard errors of the changes in the thresholds from year to year are smaller than the 

standard errors of the annual thresholds. This is expected since each year’s threshold is based on a rolling 12 quarters of 

data, and there is a considerable amount of overlap in the data used to compute the thresholds of two consecutive 

years.

 

1 See, http://www.census.gov/hhes/www/povmeas/tables.html . 2 Changes in the computer programs to produce the thresholds were introduced over the years as Garner and Short worked with the

CE data more and more in a poverty thresholds framework. Changes in the computer code reflected refinements in the definition of 

expenditures. 3 Garner, Thesia I. and Kathleen S. Short, “Identifying the Poor: Poverty Measurement for the U.S. from 1996 to 2005,” Review of 

Income and Wealth, published online January 25, 2010.
2 

The coefficient of variation (CV) is a measure of the threshold’s relative precision. It is computed as the standard error 

divided by the threshold in percentage terms. Smaller coefficients of variation indicate more precision than larger 

coefficients of variation. The coefficients of variation for all of the annual thresholds are about 1%, meaning they all 

have a high degree of precision. 

Changes in the thresholds from year to year, associated standard errors, and statistics are presented in the right most 

section of the table. Note, the calculated t-statistic is the inverse of the CV of the change. The t-statistics are quite large, 

and they all indicate that the changes in the thresholds are statistically significant at the 0.01 level; this means that the 

thresholds are statistically significantly different from each other from year to year over the 2006 to 2008 period.

Standard Errors of FCSU and FCSUM Thresholds (with Principal Payments) and Standard Errors of Change in 

Thresholds: 2006, 2007, and 2008 for Reference Families

Change from Year to Year

 Threshold

Standard 

Error

Coefficient of 

Variation

Change from 

Previous Year

Standard 

Error 

Coefficient of 

Variation

t statistic of 

difference

FCSU 

2006 $24,069 $296 1.23%

2007 $25,804 $276 1.07% $1,736 $214 12.34% 8.10

2008 $27,043 $337 1.25% $1,239 $234 18.86% 5.30

FCSUM 

2006 $25,855 $245 0.95% 

2007 $27,797 $307 1.11% $1,942 $243 12.52% 7.99 

2008 $29,654 $400 1.35% $1,857 $277 14.94% 6.69

Source of data: Consumer Expenditure Interview Survey data.

NOTE: For each threshold year, 12 quarters of CE Interview data are used. Expenditures from each quarter of the 

12 quarter series are adjusted to threshold year dollars using annual CPI with one exception. The exception is for 

expenditures for January through March of the year following the threshold year. These expenditures are adjusted 

by that quarter’s CPI, which is created by averaging the monthly CPI all items indexes from January, February, and 

March. Thus, this quarterly CPI for 2009 is used to adjust 2009Q1 expenditure data to 2008 threshold year dollars.

The thresholds presented above are the same as those sent to Kathleen Short at the Census Bureau on October 

14, 2009.

These results were produced by Thesia I. Garner, Research Economist, Division of Price and Index Number 

Research, Bureau of Labor Statistics for research purposes only using the Consumer Expenditures Interview 

Survey. Results are released to inform interested parties of ongoing research and to encourage discussion of work 

in progress. Decisions related to statistical, methodological, technical, and operational issues were made by the 

author and do not necessarily reflect official positions or policies of the U.S. Bureau of Labor Statistics.

________________________________________________________________________________ 

I thank Dave Swanson, BLS Mathematical Statistician, for his assistance with the calculation of the statistical measures and for his review of this 

Note. I also thank staff members in the Divisions of Consumer Expenditure Surveys and Price Index Number Research for their helpful comments.