Measuring Poverty in the United States: Comparing Measurement Methods
Tara O'Neill Hayes
Executive Summary
The Official Poverty Measure (OPM) estimates roughly how many people are unable to afford basic needs without any (or with very little) government assistance based on income and an average national cost of food in the 1960s, adjusted annually for inflation.
The Supplemental Poverty Measure (SPM) uses more of a net income approach to estimate how many people are unable to afford anything besides basic needs after they have received government assistance and paid certain expenses, based on average costs of food, clothing, utilities, and localized housing costs.