From f0767674d9a5d6d8a49beab0eaf44e9467a6f941 Mon Sep 17 00:00:00 2001 From: Max Ghenis Date: Mon, 28 Sep 2026 08:37:22 -0400 Subject: [PATCH 1/2] Document the default poverty measure: absolute, before housing costs docs/outputs.md gains a 'Which measure to headline' section under Poverty. It says PolicyEngine headlines absolute poverty before housing costs in the UK (absolute_bhc), lists the other measures calculate_uk_poverty_rates and calculate_us_poverty_rates return, and gives the reasons. Relative poverty tracks inequality: the line is 60% of each simulation's own median, so it moves with the reform. After-housing-costs measures subtract housing spending, much of it discretionary. It also documents the absolute line itself: HBAI's FYE 2011 line uprated by CPI. DWP moved its reference year to FYE 2025 in March 2026, so rates on this line are lower than DWP's current absolute figures. Co-Authored-By: Claude Opus 5.5 --- changelog.d/533.added.md | 1 + docs/outputs.md | 12 ++++++++++++ 2 files changed, 13 insertions(+) create mode 100644 changelog.d/533.added.md diff --git a/changelog.d/533.added.md b/changelog.d/533.added.md new file mode 100644 index 00000000..a67fb8ba --- /dev/null +++ b/changelog.d/533.added.md @@ -0,0 +1 @@ +Documented the default headline poverty measure (UK: absolute poverty before housing costs) and the reasons for it. diff --git a/docs/outputs.md b/docs/outputs.md index 2d105461..41f25527 100644 --- a/docs/outputs.md +++ b/docs/outputs.md @@ -179,6 +179,18 @@ rates.dataframe Call it once per simulation for a baseline-vs-reform comparison. Age / gender / race breakdowns: `calculate_us_poverty_by_age`, `_by_gender`, `_by_race`. UK counterparts: `calculate_uk_poverty_rates`, `_by_age`, `_by_gender`. +### Which measure to headline + +PolicyEngine headlines **absolute poverty before housing costs** in the UK: `absolute_bhc` in `calculate_uk_poverty_rates`, from the `in_poverty_bhc` variable. That function also returns `absolute_ahc`, `relative_bhc` and `relative_ahc`. In the US, `calculate_us_poverty_rates` returns the Supplemental Poverty Measure (`spm`) and deep SPM poverty (`spm_deep`). + +The reasons: + +- **Relative poverty measures inequality, not poverty.** policyengine-uk draws the relative line at 60% of each simulation's own median income. A reform that raises the median raises the line with it, so relative poverty can rise when every household is better off. + - Example: raising the personal allowance to £15,000 in 2026-27 lowers absolute child poverty and raises relative child poverty. +- **After-housing-costs measures subtract housing spending,** and much of that spending is a choice: a flat or a mansion. International poverty statistics are computed on income before housing costs. + +The absolute line is HBAI's FYE 2011 line, 60% of the 2010-11 median, uprated by CPI (the `household.poverty.absolute_poverty_threshold_bhc` and `_ahc` parameters). In March 2026 DWP moved its absolute reference year to FYE 2025 for the years with administrative data linking. Rates on PolicyEngine's line are therefore lower than DWP's current absolute figures. + ## Inequality Gini, top-10 share, top-1 share, bottom-50 share — for one simulation. From f78903acfe57ca0718f772461816d01228baa574 Mon Sep 17 00:00:00 2001 From: Max Ghenis Date: Mon, 28 Sep 2026 09:17:25 -0400 Subject: [PATCH 2/2] Describe the FYE 2025 absolute poverty line in 'Which measure to headline' HBAI's absolute reference year is FYE 2025 from FYE 2022 (March 2026 release): 60% of the unrounded FYE 2025 medians, 431.69 BHC / 373.89 AHC a week (HBAI table 2.4ts). policyengine-uk follows the same split from 2.102.3 (PolicyEngine/policyengine-uk#1889); say so, and that earlier versions use the FYE 2011 line throughout. Co-Authored-By: Claude Opus 5.5 --- docs/outputs.md | 2 +- 1 file changed, 1 insertion(+), 1 deletion(-) diff --git a/docs/outputs.md b/docs/outputs.md index 41f25527..ff1708e1 100644 --- a/docs/outputs.md +++ b/docs/outputs.md @@ -189,7 +189,7 @@ The reasons: - Example: raising the personal allowance to £15,000 in 2026-27 lowers absolute child poverty and raises relative child poverty. - **After-housing-costs measures subtract housing spending,** and much of that spending is a choice: a flat or a mansion. International poverty statistics are computed on income before housing costs. -The absolute line is HBAI's FYE 2011 line, 60% of the 2010-11 median, uprated by CPI (the `household.poverty.absolute_poverty_threshold_bhc` and `_ahc` parameters). In March 2026 DWP moved its absolute reference year to FYE 2025 for the years with administrative data linking. Rates on PolicyEngine's line are therefore lower than DWP's current absolute figures. +The absolute line is HBAI's: 60% of median income in a fixed reference year, held constant in real terms (the `household.poverty.absolute_poverty_threshold_bhc` and `_ahc` parameters). Since the March 2026 HBAI release, DWP's reference year is FYE 2025 for FYE 2022 onward: 60% of the FYE 2025 medians of £719.48 (BHC) and £623.14 (AHC), so £431.69 and £373.89 a week (HBAI table 2.4ts). Earlier years keep the FYE 2011 reference, and DWP plans to extend FYE 2025 back to FYE 2019 in its March 2027 release. policyengine-uk follows the same split from version 2.102.3: FYE 2022 to FYE 2024 use HBAI's own annual CPI-variant deflators, and later years are uprated by the OBR's CPI forecast. Earlier policyengine-uk versions use the FYE 2011 line throughout, so their absolute rates are lower than DWP's. ## Inequality