Chapter

Poverty Redefined as Low Consumption and Low Wealth, Not Just Low Income

Bruce Headey, Peter Krause and Gert G. Wagner

in Counting the Poor

Published in print June 2012 | ISBN: 9780199860586
Published online September 2012 | e-ISBN: 9780199932948 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199860586.003.0017

Series: International Policy Exchange Series

Poverty Redefined as Low Consumption and Low Wealth, Not Just Low Income

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This chapter suggests that measures of financial poverty should be based on individuals having low consumption and low wealth, as well as low income. Having set out a case for doing this, it provides revised estimates of poverty based on all three dimensions of economic well-being in Australia. Then, using this extended measure of financial poverty, it reassesses links between poverty and a range of subjective/psychological outcomes relating to life satisfaction, perceived standard of living, personal relationships, and health. After completing the initial analysis for Australia, the robustness of estimates is verified by implementing a similar measure of financial poverty in Germany requiring individuals to have both low income and low wealth to be considered poor. The analyses indicate that poverty, measured in this more comprehensive manner, has worse effects, a wider range of effects, and perhaps more complicated effects than most recent research has admitted.

Keywords: poverty measurement; consumption; wealth; income; Australia; economic well-being; life satisfaction; standard of living; personal relationships; health

Chapter.  10695 words.  Illustrated.

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