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A Consistent Poverty Approach to Assessing the Sensitivity of Income Poverty Measures and Trends

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  • Peter Saunders
  • Trish Hill

Abstract

"This paper examines the sensitivity of estimates of income poverty rates and trends to variations in the poverty line and to whether or not certain households are included or excluded from the sample used to estimate poverty. The approach draws on the concept of consistent poverty, which has been used to identify those with incomes below the poverty line who also experience deprivation. Our approach involves excluding households with incomes below the poverty line if they report zero or negative income or are self-employed, have expenditure well in excess of their income, have substantial wealth holdings, or if they do not report having experienced financial stress over the past year. The combined impact of all four exclusions is to reduce the half-median income poverty rate from 9.9 per cent to 5.4 per cent, but also suggests that poverty increased by more over the decade to 2003-04 than the original estimates indicate." Copyright (c)2008 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research.

Suggested Citation

  • Peter Saunders & Trish Hill, 2008. "A Consistent Poverty Approach to Assessing the Sensitivity of Income Poverty Measures and Trends," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 41(4), pages 371-388, December.
    • Handle: RePEc:bla:ausecr:v:41:y:2008:i:4:p:371-388
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    Cited by:

    1. Peter Saunders, 2013. "Researching poverty: Methods, results and impact," The Economic and Labour Relations Review, , vol. 24(2), pages 205-218, June.
    2. Peter Saunders & Yuvisthi Naidoo, 2009. "Poverty, Deprivation and Consistent Poverty," The Economic Record, The Economic Society of Australia, vol. 85(271), pages 417-432, December.
    3. Francisco Azpitarte, 2014. "Was Pro-Poor Economic Growth in Australia for the Income-Poor? And for the Multidimensionally-Poor?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 117(3), pages 871-905, July.
    4. Francisco Azpitarte, 2012. "Was Economic Growth in Australia Good for the Income-Poor? and for the Multidimensionally-Poor?," Working Papers 278, ECINEQ, Society for the Study of Economic Inequality.
    5. Hooi Hooi Lean & Ma. Rebecca Valenzuela, 2012. "Inequality in Australia 1983-2004: A Stochastic Dominance Approach," Monash Economics Working Papers 06-12, Monash University, Department of Economics.

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