Poverty or preference: What do ‘consensual deprivation indicators’ really measure?

Consensual deprivation indicators represent one influential approach to measuring poverty,. The approach is based on the assumption that there is a broad consensus on what goods/services families should be able to afford, and that we can use enforced non-possession of those items to measure deprivation. Using data from two GB surveys from 1999, this paper argues that (a) the degree of consensus about on what items families should be able to afford is limited, and, (b) that information on those who ‘cannot afford’ ‘necessities’ is potentially misleading. (Almost) all families who cannot afford two or more ‘necessities’ actually have a number of ‘non-necessities’, often many. This suggests that their patterns of preferences, and hence spending, are not typical, and they are choosing to buy other goods. An alternative approach based on possession of items, whether through choice or constraint would be simpler, cheaper to implement and arguably equally valid. JEL classification: I32.