RURAL AND URBAN POVERTY: AN INCOME/NET WORTH APPROACH

Abstract

This paper examines rural and urban changes in the distribution of poverty that would result from modifying the conventional poverty measure to include the annuity value of household net worth. Use of this new income/wealth measure caused numerous shifts in the location and demography of the poverty population. Among those more often found to be in poverty under the new measure were young, renter, and large central city resident households. Age, homeownership, farm employment, education, retirement status, public assistance participation, and residence in the West were important factors in explaining the divergence of the WH and INC measures. The age and retirement impacts were significantly different in rural and urban areas. Rural residence itself was not an important factor in explaining WH and INC differences.