Explaining the low overlap between income poverty and material deprivation: evidence for Australia

Stream: Measuring wellbeing and data gaps
Date: Tuesday, 10 September 2019
Time: 1.35 pm – 3.15 pm

Abstract

The consensual deprivation approach is now widely used to complement the conventional income-based poverty approach in many OECD countries. However, although many studies indicate a relatively low overlap between (income) poverty and (material) deprivation in aggregate and for specific demographic groups, there have been few attempts to understand why this is the case and what factors are contributing to it.

This paper draws on findings derived from wave 14 (2014) of the Household, Income and Labour Dynamics in Australia (HILDA) survey to investigate three potential explanations for the low deprivation/income poverty overlap results. The first examines the role of housing costs by comparing the overlaps produced when poverty is estimated using income after housing costs (AHC) rather than before housing costs (BHC). The AHC measure may better capture the (in)ability to purchase the necessary items that defines deprivation status under the consensual approach. The second explanation examines the role of overall net wealth in providing access to resources that potentially mitigate the incidence of deprivation which are not captured in either the BHC or AHC income measures. The third explanation investigates whether the low overlaps are a consequence of timing lags between income fluctuations and ownership of the items used to identify deprivation. All three explanations are examined in aggregate and for specific demographic groups, and the findings provide further evidence of the unique contribution of the deprivation approach to poverty analysis.

Authors

Peter Saunders (Presenter), Social Policy Research Centre, UNSW Sydney
Peter Saunders was the Director of the Social Policy Research Centre at UNSW from February 1987 until July 2007, and now holds a Research Chair in Social Policy. His research interests and publications cover: poverty; social exclusion and social security; economic and social inequality; household living standards and comparative social policy. He was elected a Fellow of the Academy of the Social Sciences in Australia in 1995 and was the first President of the Australian Social Policy Association between 2009 and 2012. He has been President of the Foundation for International Studies on Social Security since 2009.

Yuvisthi Naidoo (Presenter), Social Policy Research Centre, UNSW Sydney
Dr Yuvisthi NAIDOO is a Research Fellow at the Social Policy Research Centre, UNSW. She is a social policy researcher and quantitative analyst whose focus is on social disadvantage and social indicators specialising in poverty and inequality, deprivation and social exclusion, well-being, and ageing societies. Yuvisthi has experience working on Australian Research Council funded projects on poverty, deprivation and social exclusion in Australia. Yuvisthi previously worked for the Australian Housing and Urban Research Institute and in the corporate sector with strategic research consultants, Stancombe Research and Planning, and consumer goods conglomerate, Unilever. She completed her PhD in 2017.