The Antipoverty Effectiveness of In-Kind Transfers

In recording its poverty statistics, the U.S. Census Bureau ignores the impact of in-kind transfers on the extent of poverty. In this paper, we estimate that when in-kind food, housing, and medical care transfers are counted and measured at their cash-equivalent value, and when Census income is adjusted for underreporting, federal taxes, and intrahousehold income-sharing, the 1972 poverty count and the poverty gap are halved. In addition, we find that in-kind transfers are relatively inefficient devices for reducing income poverty, delivering only about 31 cents of anitpoverty effect per dollar of program cost.