Summarising multiple deprivation

Deprivation scales derived from multiple, typically dichotomous, indicators, are increasingly being used to measure households’ standards of living, and to complement poverty measures based on low income. We propose a type of multivariate probit model that generalizes the classical measurement model underlying the deprivation scale approach, allowing for heterogeneity and explicitly recognizing the dichotomous nature of the deprivation indicators. The arguments are illustrated with an examination of basic lifestyle deprivation in Britain in the mid-1990s.