18 Pages Posted: 31 Dec 2008
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.
Suggested Citation: Suggested Citation
Saunders, Peter and Hill, Trish, A Consistent Poverty Approach to Assessing the Sensitivity of Income Poverty Measures and Trends. Australian Economic Review, Vol. 41, No. 4, pp. 371-388, December 2008. Available at SSRN: https://ssrn.com/abstract=1318410 or http://dx.doi.org/10.1111/j.1467-8462.2008.00521.x
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