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This paper develops and applies new measures of poverty that overcome a number of specific methodological flaws in the official US poverty statistics. Sen's distribution sensitive index of poverty and each of its components are estimated at several distinct poverty thresholds for the period 1961-1996. Distribution sensitive measures of urban poverty are corrected for interarea differences in the cost of living and for comprehensive incomes. Recently developed statistical inference procedures are applied. Official poverty statistics are shown to be seriously misleading in some time periods and the choice of a poverty line affects conclusions concerning changes in poverty. [ABSTRACT FROM AUTHOR]

This article focuses on the relative and absolute nature of poverty index. Previous poverty research has made use of axioms to construct and evaluate distribution-sensitive poverty measures. An index is distribution sensitive if it satisfies a weak transfer axiom. Poverty decreases when income is transferred from a high-income poor person to low income person. A distribution-sensitive measure is appealing because it reflects the extent of deprivation among the poor and incorporates aspects of poverty that are ignored by standard measures such as headcount ratio and poverty gap ratio. This paper concentrates on the implications of the joint effects of scale and translation invariance.