September 5, 2006

Why you should never trust government statistics

Greg Mankiw has an interesting post describing the absurdity of how poverty is measured in the US, especially in regards to the EITC:

...the Census omits the income from the EITC when computing the poverty rate. As a program to reduce measured poverty, the program is, by assumption, doomed to failure.Of course, this is not really a problem with the EITC but, rather, a problem with the measured poverty rate. It makes no sense to evaluate poverty with a statistic that ignores the effects of one of the largest and most rapidly growing anti-poverty tools we have. But that is what the official statistics do.