Economist's research reveals poverty should be measured by more than income

November 18, 2016
Credit: George Hodan/public domain

Since social scientists and economists began measuring poverty, the definition has never strayed far from a discussion of income.

New research from Georgia Tech economist Shatakshee Dhongde shows there are multiple components of that more accurately describes a household's economic condition. Dhongde looks at "" more than simply low , and her work finds that almost 15 percent of Americans are deprived in multiple dimensions.

"This study approaches poverty in a new way," said Dhongde, who recently published "Multi-Dimensional Deprivation in the U.S." in the journal Social Indicators Research.

"We tried to identify what is missing in the literature on poverty, and measure deprivation in six dimensions: health, education, standard of living, security, social connections, and housing quality. When you look at deprivation in these dimensions, you have a better picture of what is really going on with households, especially in developed countries like the United States."

Co-authored with Robert Haveman of the University of Wisconsin-Madison, the study looks at deprivation in the U.S. since the onset of the Great Recession, roughly 2008 to 2013. The source data for the study came from the American Community Survey conducted by the U.S. Census Bureau.

Dhongde's and Haveman's analysis showed that while the official income-based poverty rate averaged 13.2 percent from 2008 to 2013, the multi-dimensional deprivation index averaged 14.9 percent.

"Lack of education, severe housing burden and lack of health insurance were some of the dimensions in which Americans were most deprived in," Dhongde said. "Even though deprivation did increase during the recession, it began to improve between 2010 and 2013."

When placed side-by-side, the multi-dimensional deprivation index was a better reflection of the people's economic state than income alone, and the index was able to detect a more nuanced view of what might be driving people's dissatisfaction.

Interestingly, the study showed that there was not much overlap between individuals who were income poor and those who were multi-dimensionally deprived. Only 6.6 percent of the income poor were also deprived in multiple dimensions.

"Almost 30 percent of individuals with incomes s lightly above the poverty threshold experienced multiple deprivations," Dhongde said. "Our analysis underscores the need to look beyond income based poverty statistics in order to fully realize the impact of the recession on individual's well-being."

In order for a respondent to qualify as having multi-dimensional deprivation, he or she had to have more than one indicator of deprivation, such as lack of education and severe housing burden.

While research on deprivation has been growing in recent years in developing countries, this is the first time such an approach has been taken with poverty in the United States. In this country, the study found the greatest deprivation in education, housing and health insurance, and the greatest prevalence of deprivation was in the southern and western U.S. The study specifically cited Asian and Hispanic populations as experienced the the greatest prevalence of deprivation among ethnic groups.

"From our analysis there are several policy recommendations that can be made," Dhongde said. "First, significant reduction of deprivation can be attained by implementing new policies related to coverage, such as through the Affordable Care Act; improving high school completion rates, especially among Hispanics; and constraining housing costs. By looking at a broader set of criteria than just income, policy decisions are clearer and solutions can be more easily identified."

Explore further: Student poverty study reveals disparities

More information: Shatakshee Dhongde et al. Binary data, hierarchy of attributes, and multidimensional deprivation, The Journal of Economic Inequality (2016). DOI: 10.1007/s10888-016-9336-4

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RichManJoe
5 / 5 (1) Nov 18, 2016
There is nothing new here. Have these economists not read Adam Smith's "...Wealth of Nations"? Smith spends much time talking about various aspects of wealth (when Smith wrote this treatise (1776) wealth mean well being, not money, as it does now) and poverty. He referred to those who had a lot of money as opulent.
gkam
2.3 / 5 (6) Nov 18, 2016
If we assess our society by this standard, the disparity between the have and have-less groups is huge.

No society is stable with this kind of disparity of wealth and opportunity without a severe and repressive police state.
rrrander
3 / 5 (4) Nov 19, 2016
They've been trying to "cure" poverty for 200 years. The only way to do it outside of just giving money to the poor would be to raise IQ's of the poor and that won't happen.
gkam
1.6 / 5 (7) Nov 19, 2016
I want to cure poverty of the soul.

Our recent election and the last post show us we have lost our Humanity.

Jeffhans1
5 / 5 (1) Nov 19, 2016
They've been trying to "cure" poverty for 200 years. The only way to do it outside of just giving money to the poor would be to raise IQ's of the poor and that won't happen.


Give it another decade and we will have brain implants effectively boosting IQs to frightening levels overnight.
abecedarian
5 / 5 (3) Nov 19, 2016
I want to cure poverty of the soul.
Our recent election and the last post show us we have lost our Humanity.

Our recent election should be telling you that we have lost faith in our leaders and are trying to regain our humanity, since the gaps between those who have and those without have been widening at a quickening rate for over 20 years... since around 1992.
antialias_physorg
5 / 5 (4) Nov 20, 2016
Our recent election should be telling you that we have lost faith in our leaders and are trying to regain our humanity,

1) Money does not equal humanity. (I also wonder how a policy of racism is going to bring back 'humanity'...care to explain that?)
2) You really think the gap betwen rich and poor is going to close undet that guy? Really? A man who's famous for not paying his workers? Let's see how that works out.
TheGhostofOtto1923
3 / 5 (2) Nov 20, 2016
1) Money does not equal humanity. (I also wonder how a policy of racism is going to bring back 'humanity'...care to explain that?)
2) You really think the gap betwen rich and poor is going to close undet that guy? Really? A man who's famous for not paying his workers? Let's see how that works out
1) trump isn't a racist 2) he's not famous for not paying his workers competitively. 3) your inability to check your sources reveals your famous tendency to pick only those facts which support your own preconceived opinions.

How come?

It's OK- millions of shills over here are just as weak as you. Schwachzinnige.
gkam
1 / 5 (4) Nov 20, 2016
It is the poverty of morality we rue. I want to ask Trump which one of his developing daughters was the "piece of ass" he discussed on national radio.

Yeah, his level of thought matches that of the conservatives. And now, we will see a REALLY big disparity of wealth and opportunity.
dan42day
1 / 5 (1) Nov 20, 2016
What I found interesting about this article is that it addresses a situation that I personally have noticed since the introduction of the Affordable Care Act.

It seems that a lot of people that I know who have virtually no reportable income pay nothing for health care and prescription drugs, no premiums, no co-pays, no deductibles, absolutely nothing.

At the same time people that I know that are struggling with low paying jobs or living on social security and paying for supplemental insurance on Medicare are paying thousands a year for the same care. This is especially true if you own your own home, even if you have very low equity.

It's almost as though the system is designed in favor of those who have absolutely nothing to lose and won't lift a finger to help themselves, or work illegal jobs like drug dealing or under-the-table jobs to avoid paying taxes.

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