The Impact of Alternative Poverty Definitions on the Interstate Allocation of Federal Funds

For more than a decade the federal government has used poverty counts in allocating federal funds to States for ultimate use by the poor. Several different poverty concepts are currently used in determining the amount of federal funds received by each state. A main point to the analysis here is that adverse distributional effects exist in several federal antipoverty fund disbursement schemes: States with high family income averages receive relatively more cash transfers than low income States.