L.A.’s poverty rate is actually 20 percent higher than official figures indicate, according to a report released Thursday from the Public Policy Institute of California.

The official U.S. average for the poverty rate in Los Angeles County in 2004 was 16 percent, or 1.6 million people below the poverty line out of a total population of 10 million.

But that figure does not account for the high cost of living in the region, especially the fair market value of apartments and the cost of basic goods. Adjusting for this, the PPIC report puts the county’s poverty rate at 20 percent. That places an additional 400,000 people below the poverty line.

“These cost-adjusted poverty rates are meant to provide a more realistic comparison of poverty rates across geographic regions,” said Deborah Reed, the PPIC analyst who authored the study. Reed noted that poverty rates are crucial for determining the amount of federal aid the state receives.