Andrew Keatts | @Andy_Keatts | December 21, 2015
For all the resources and attention paid to combating poverty, the whole endeavor suffers from relatively limited data.
A new measure that debuted this fall aims to correct that problem.
Researchers at Indiana University’s Lilly Family School of Philanthropy partnered with Salvation Army to develop the Human Needs Index, a real-time measure of poverty that they hope will better inform both policy makers and service providers of the true on-the-ground needs of poor Americans.
The idea is that by having a better sense of the needs of the poor in real-time; resources can be directed more efficiently.
“I think data is part of the solution; I don’t think it is the only solution,” said Una Osili, a professor of economics and director of research at the Lilly Family School of Philanthropy.
The index is based on the services poor people use at Salvation Army locations around the country in a given month. Each time a person comes in and requests help on his energy bill, for example, it’s counted towards one of the index’s seven measures of poverty. It also counts requests for assistance with medical needs, furniture, clothing, housing, groceries and meals.
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That’s part of the benefit of the index, those behind it argue. Most poverty measures rely on income or the unemployment rate. This provides far more specific data, telling those who work in the field where and how specific needs are spiking or waning in a given month.
And the fact that the data is coming nearly in real-time is a major benefit too, they say.
“Data is changing how we make decisions in a lot of different parts of society today, and of course the common reference is Moneyball,” Osili said, referring to the book and movie that depicts how the Oakland Athletics baseball team used advanced statistics. “I think it’s important the nonprofit sector is a part of that.”
Bringing that clarity to nonprofits and poverty-focused services is what led Brookings Institution nonresident senior fellow Scott Allard to praise the index when it was released. While writing his book, Out of Reach, which covered how poor families struggle to get out of the government safety net, he was dismayed by the difficulty of finding even basic service information in certain areas. If it’s that hard for a researcher, imagine how hard it is for anyone else.
“In the end, the Human Needs Index is more than just a cool data visualization tool or source of information for academic inquiry into the measurement of need, It models how communities and philanthropy might collect, share, and use data to improve outcomes for clients, organizations, and community residents,” Allard wrote.
Taking a step back, the data tracks well with existing national poverty measures. The index – a composite based on the seven types of request for assistance – was low when the economy was booming. It rose when the economy shrank. In other words: it acts the way you’d expect. And even at the national level, it’s sensitive enough to pick up the effect on poverty of specific, isolated events like Hurricane Sandy. But unlike other measures, it picks up differences in regional or seasonal needs over time.
For instance, Osili mentioned that when officials first observed the data, she and her researchers noticed a huge uptick in energy-related needs each April. It was big and persistent. They thought it might be a bug of data collection.
It turned out that many utilities are barred from shutting off residents’ power in the cold winter months, when people could die if they decided to do so. Utility companies react by just waiting until April, when temperatures warm up, to take action. That’s when people came to the Salvation Army for help.
“Most policy makers wouldn’t know that,” Osili said. “This insight is useful for governments wondering when people need help, or when service providers plan their own interventions.”
Likewise, the index’s regional data reveals that the entire country doesn’t move as one when it comes to poverty need. The southern region showed the most volatility in its index scores; researchers say that may be because of repeated, large-scale natural disasters. The western region, meanwhile, showed consistent and dramatic increases in poverty prior to the Great Recession, while the rest of the country was stable, and continued to have poverty need grow more than any other region through the recession.
Though it’s new, Osili said leaders plan on expanding its measure to cover metropolitan areas and counties. Initially, it was easier to validate data by comparing it to existing national poverty measures – by noting how well it correlated with the unemployment rate or food stamp usage, for instance.
That’s a harder task at the local level, she said, since the local level doesn’t have existing data that’s as comprehensive as the federal government.
But, she said, the data’s especially useful for the same reason that it’s hard to validate: the vacuum of information.