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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.

Suggested Citation

  • Krishna Pendakur, 2001. "Consumption Poverty in Canada, 1969 to 1998," Canadian Public Policy, University of Toronto Press, vol. 27(2), pages 125-149, June.
  • Handle: RePEc:cpp:issued:v:27:y:2001:i:2:p:125-149
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    References listed on IDEAS

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    1. Donaldson, D. & Pendakur, K., 1999. "Equivalent-Income Functions and Income-Dependent Equivalence Scales," Discussion Papers dp99-8, Department of Economics, Simon Fraser University.
    2. 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.
    3. 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 405-427, December.
    4. Amiel,Yoram & Cowell,Frank, 1999. "Thinking about Inequality," Cambridge Books, Cambridge University Press, number 9780521466967, May.
    5. Diewert, W E, 1974. "Intertemporal Consumer Theory and the Demand for Durables," Econometrica, Econometric Society, vol. 42(3), pages 497-516, May.
    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. 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.
    8. Richard Blundell & Ian Preston, 1998. "Consumption Inequality and Income Uncertainty," The Quarterly Journal of Economics, Oxford University Press, vol. 113(2), pages 603-640.
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    Cited by:

    1. Shahateet, Mohammed & Al-Tayyeb, Saud, 2007. "Regional consumption inequalities in Jordan: Empirical study," MPRA Paper 57400, University Library of Munich, Germany.
    2. Don J. DeVoretz & Florin P. Vadean, 2008. "Cultural Differences in the Remittance Behaviour of Households: Evidence from Canadian Micro Data," Studies in Economics 0814, School of Economics, University of Kent.
    3. Thomas F. Crossley & Krishna Pendakur, 2002. "Consumption Inequality," Department of Economics Working Papers 2002-09, McMaster University.
    4. Shahateet, Mohammed, 2006. "How Serious is Regional Economic Inequality in Jordan? Evidence from Two National Household Surveys," MPRA Paper 57118, University Library of Munich, Germany.
    5. Kevin Milligan, 2008. "The Evolution of Elderly Poverty in Canada," Canadian Public Policy, University of Toronto Press, vol. 34(s1), pages 79-94, November.
    6. Michael D. Hurd & Susann Rohwedder, 2006. "Economic Well-Being at Older Ages: Income- and Consumption-Based Poverty Measures in the HRS," NBER Working Papers 12680, National Bureau of Economic Research, Inc.
    7. 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.

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