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Consumption Poverty in Canada, 1969 to 1998

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  • Krishna Pendakur

Abstract

In this paper, I estimate the poverty rate as the proportion of individuals who have consumption - rather than income - lower than an absolute poverty line. The absolute poverty line used is based on the expenditure necessary to achieve a minimum level of material well-being. It does not change over time with changing social values as do relative poverty lines. Consumption is used because consumption levels are chosen by households with some knowledge of future and past incomes, and may thus be a better indicator of material well-being than income. Here, consumption is adjusted for differences in the prices faced by, and demographic characteristics of, different households.The story told by consumption poverty measures is mixed. As with income poverty measures, the consumption poverty rate declined over the 1970s and 1980s - all boats rose in the rising tide. However, the 1990s tell a different story. The consumption poverty rate increased by more than half between 1992 and 1998. Outcomes for children were even worse. The rate of consumption poverty among children more than doubled between 1992 and 1998.

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Bibliographic Info

Article provided by University of Toronto Press in its journal Canadian Public Policy.

Volume (Year): 27 (2001)
Issue (Month): 2 (June)
Pages: 125-149

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Handle: RePEc:cpp:issued:v:27:y:2001:i:2:p:125-149

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  1. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
  2. Diewert, W E, 1974. "Intertemporal Consumer Theory and the Demand for Durables," Econometrica, Econometric Society, vol. 42(3), pages 497-516, May.
  3. Donaldson, D. & Pendakur, K., 1999. "Equivalent-Income Functions and Income-Dependent Equivalence Scales," Discussion Papers dp99-8, Department of Economics, Simon Fraser University.
  4. Richard Blundell & Ian Preston, 1997. "Consumption, inequality and income uncertainty," IFS Working Papers W97/15, Institute for Fiscal Studies.
  5. Lars Osberg & Kuan Xu, 1999. "Poverty Intensity: How Well Do Canadian Provinces Compare?," Canadian Public Policy, University of Toronto Press, vol. 25(2), pages 179-195, June.
  6. Donaldson, David, 1992. "On The Aggregation Of Money Measures Of Well-Being In Applied Welfare Economics," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(01), July.
  7. Katz, Arnold J, 1983. "Valuing the Services of Consumer Durables," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 29(4), pages 405-27, December.
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Cited by:
  1. Michael Hurd & Susann Rohwedder, 2006. "Economic Well-Being at Older Ages: Income- and Consumption-Based Poverty Measures in the HRS," Working Papers 410, RAND Corporation Publications Department.
  2. Michael R. Veall, 2008. "Canadian Seniors and the Low Income Measure," Canadian Public Policy, University of Toronto Press, vol. 34(s1), pages 47-58, November.
  3. Kevin Milligan, 2007. "The Evolution of Elderly Poverty in Canada," Social and Economic Dimensions of an Aging Population Research Papers 170, McMaster University.
  4. Don J. DeVoretz & Florin P. Vadean, 2008. "Cultural Differences in the Remittance Behaviour of Households: Evidence from Canadian Micro Data," Studies in Economics 0814, Department of Economics, University of Kent.
  5. Thomas F. Crossley & Krishna Pendakur, 2002. "Consumption Inequality," Department of Economics Working Papers 2002-09, McMaster University.

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