“There are lies, damned lies, and statistics. Then, there are annual poverty figures.” Both liberal and conservative economists believe U.S. poverty statistics are suspect.

Here are some reasons:

(1) They do not take into account in-kind benefits such as food stamps and tax credits.

(2) They do not consider regional cost-of-living differences.

(3) They do not take into account unreported income.

(4) Food accounts for about one-seventh of a family’s budget, not one-third.

(5) Ownership of assets such as homes, cars, and appliances is not taken into account.

a. What would the effect of correcting each of these be on measured poverty?

b. Would making these changes be fair?