Construction of a Preliminary Market Basket Measure of Poverty
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Published: 1998
Total Pages: 38
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DOWNLOAD EBOOKThis paper develops a preliminary market-based measure of povery in response to the need for a measure of poverty that would be easy to understand, sensitive to geographic cost differences, related to changes in costs of consumption rather than changes in income, useful for measuring the impact on poverty of the National Child Benefit, and credible with respect to the severity of poverty. The main characteristics of the measure are: costs for food, clothing, and shelter are identified individually; costs for other expenditures are aggregated; geographic differences in the costs of goods and services are reflected; costs reflect family size; and costs are compared to family income available for consumption. Steps involved in constructing the measure are described and the differences in poverty incidence and depth, by province, are examined when calculated by the market-based measure and by other commonly used measures. Finally, further steps for development of the market-based poverty measure are outlined. The appendix includes a sensitivity analysis and an overview of current measures of poverty in Canada and internationally.
