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ADJUSTING POVERTY THRESHOLDS 182 FIGURE 3-5 Current and proposed equivalence scales expressed relative to a value of 1.00 for a family of two adults and two children. a Each child is treated as 0.70 of an adult, and the number of adult equivalents in the family is raised to a power of 0.75. The resulting scale value for each family type is converted to a ratio of the scale value for two-adult/two-child families. b Each child is treated as 0.70 of an adult, and the number of adult equivalents in the family is raised to a power of 0.65. The resulting scale value for each family type is converted to a ratio of the scale value for two-adult/two-child families. c The current scale is calculated by converting the official 1992 threshold for each family type to the 1992 threshold for a family of two adults and two children; the thresholds for unrelated individuals and two-adult families are those for people under age 65. ADJUSTMENTS BY GEOGRAPHIC AREA Overview and Recommendations There is wide agreement that it is desirable to adjust poverty thresholds for differences in prices. Indeed, the current official thresholds are regularly updated for changes in the Consumer Price Index (CPI) to keep them constant in real terms. However, no adjustment has been made for spatial differences in prices, not because the adjustment is necessarily undesirable in principle, but because of the practical difficulties of adequately measuring those differences. There are no geographic area cost-of-living indexes that correspond