Using low income and material deprivation to monitor poverty reduction
Almost all poverty measures commonly used in Canada work by setting a dollar amount – a poverty line – below which a household is said to be in poverty, above which a household is not considered poor. But when we measure poverty only according to income, we may incorrectly assess whether or not many Canadians are actually experiencing a ‘poverty level’ standard of living. An answer that is used in Europe is to complement the income yardstick with another way of measuring poverty: material deprivation. Such an indicator focuses on the outcome of not having enough financial resources, namely being unable to afford typical necessities. While income indirectly measures standard of living by assessing inputs, material deprivation attempts instead to assess directly the household’s standard of living by looking at what it actually has.