CSU Fullerton Economist Outlines Scope of Orange County Poverty


Last year, Edward J. Castronova, associate professor of economics at Cal State Fullerton, delved into the issue of poverty in Orange County and announced that the region may have a higher level than reported by the federal government – a level that puts poverty on a par with the nation as a whole.

This year, in a recent follow-up report, Castronova explored whether the level of poverty is a recent occurrence or a normal state of affairs. Using official government data from the Census Bureau’s Small Area Income and Poverty Estimates, the economist tracked local and national poverty rates from 1989 to 1998.

What he found is “a deterioration from the situation in the previous decade.”

From 1989 to 1998, median income for the county rose by $11,000, while the number of poor people rose from 197,000 to 280,000, an increase from 8.2 percent of the population to 10.1 percent.

“Orange County became home to significantly more poor people in the 1990s, and the income of the poor fell a further $7,000 behind that of the median family,” noted Castronova. “The reason this is worth noting is that inequality in the U.S. as a whole is spread out over a huge geographic and cultural space. The fact that nearly the same amount of poverty and inequality exists within Orange County, where geographic and cultural distance are much smaller, suggests that the county can anticipate much more social stress around the poverty issue than the nation will. It also suggests that Orange County’s reputation as a safe, peaceful, high-income area may be in danger,” he added.

“The result is fairly clear: Poverty in Orange County is not exactly new, but its severity certainly is,” Castronova stressed. “Something happened in the previous decade that changed Orange County from a place with less poverty than the country as a whole, to a place with the same level of poverty as everywhere else.”

Castronova’s study was funded through the Cal State Fullerton Center for Public Policy.
The full report is available at http://business.fullerton.edu/ecastronova/poverty_report.htm.

Media Contacts: Edward J. Castronova at (714) 278-4458 or ecastronova@fullerton.edu
Pam McLaren of Public Affairs at (714) 278-4852 or pmclaren@fullerton.edu