Multidimensional disadvantage and wellbeing

While poverty is thought to be an enduring cause of socioeconomic disadvantage, determining which people live in poverty is not a straightforward task. Hence, examining the relationship between poverty, disadvantage and wellbeing is complicated by the difficulty of determining the extent to which people live in poverty or the extent to which they are disadvantaged. In the past, poverty measurement has predominantly been income based. However, due to the limitations of income measurement and the somewhat arbitrary setting of income poverty thresholds, some people who are not impoverished are counted as impoverished and vice versa. Recent work in poverty measurement has endeavoured to capture measures of both deprivation and social exclusion as poverty indicators. This paper differs from previous research by examining the dimensions of disadvantage, irrespective of an a priori classification of indicators, to assess the extent to which indicators of disadvantage are in fact measuring different dimensions of disadvantage. Principal Components Analysis is used to construct measures of the different dimensions of disadvantage, and these measures are used to examine the relationship between these different dimensions of disadvantage and wellbeing.