Each ALICE Report uses a standardized set of measurements to quantify the cost of a basic household budget in each county in each state, and to show how many households are struggling to afford it.
The methodology incorporates new measures; the rationale for these measures, the parameters, descriptions, and sources are described in detail. To download the methodology overview, use the links below:
PHILOSOPHY BEHIND THE METHODOLOGY
Since the War on Poverty began in 1965, the Federal Poverty Level (FPL) has provided a standard for determining the number and proportion of people living in poverty in the U.S.
Despite the FPL’s benefit of providing a nationally recognized income threshold for determining who is poor, its shortcomings are well documented. The measure is not based on the current cost of basic household necessities, and except for Alaska and Hawaii, it is not adjusted to reflect cost of living differences across the U.S.
The FPL is so understated that many government and nonprofit agencies use multiples of the FPL to determine eligibility for assistance programs. While other alternative measures have been established, none comprehensively measure the number of households who are struggling in each county in a state. The ALICE research fills that void.
The ALICE research team developed new measures to identify and assess financial hardship at a local level and to enhance existing local, state, and national poverty measures.
Household Survival Budget is an estimate of the total cost of household essentials – housing, child care, food, transportation, technology, and health care, plus taxes and a 10 percent contingency. It is calculated separately for each county, and for six different household types.
The ALICE Threshold represents the minimum income level necessary based on the Household Survival Budget. Households below the Threshold include both ALICE households and those living in poverty.
The ALICE Income Assessment measures:
The income households need to reach the ALICE Threshold
The income they actually earn
How much public and nonprofit assistance is provided
The Unfilled Gap – how much more money is needed to reach the ALICE Threshold despite both income and assistance
SCHEDULE OF REVIEW
United For ALICE is committed to convening representatives from varying disciplines and geographies on a biennial basis to review the methodology and sources utilized in calculating the ALICE measures.
Every two years, a subset of individuals garnered from each state’s Research Advisory Committee comes together to review aspects of the methodology that require scrutiny or reevaluation. This process helps ensure our approach remains cutting edge and reflective of changes that could influence ALICE’s ability to navigate emerging family needs. To download the list of the members of this committee, click here.