Pick a measure, any measure

Insights Newsletter
7 October, 2016

Given the Government has set targets for pretty much everything else – from eradicating stoats to eradicating smokers, a target for reducing child poverty doesn’t seem too much of a stretch, right?

John Key received quite a bit of flak this week for refusing to agree to a poverty reduction target, arguing that there are many different ways of measuring poverty, and it is difficult to pick just one. 

Key admits the explanation sounds a bit airy-fairy. But it is also very true.

There are different measures of poverty, from material deprivation measures, to income measures, to self-perception measures. Key is being urged to Just Pick One, any one, as if he were choosing which tie to wear. 

Alternatively, others have pointed out that the variety of measures to choose from is actually a gift. If it is too hard to pick one definitive measure of poverty, why not adopt multiple measures and targets? It’s not rocket science, apparently.

Unfortunately, picking one measure or picking ten will still not solve the original problem Key acknowledged. It is notoriously difficult to define poverty, let alone measure it, let alone design policies around reducing that target.

Consider the target the Children’s Commissioner suggested: a material deprivation measure. These measures are composed of things that households might have to cut back on, or go without completely. Here, poverty is not just about meeting basic survival needs, but includes items considered by society to be ‘a minimum acceptable standard of living’.

How is the government supposed to design policies to reduce ‘poverty’ when the index includes things like ‘replace worn-out furniture’ or ‘have one week’s annual holiday away from home’?

Handing out cash seems like an obvious choice. But what if some households choose to spend that money on things not included in the index? Remember, there are some who think the poor cannot be trusted to make the ‘right’ decisions without excise taxes and lifestyle regulations.

To reach its target, surely it would be more cost effective to simply replace peoples’ worn-out furniture for them. How then should the government’s approach to poverty be judged if poorer households become richer but still rate high on the deprivation index?

Commentators are right, it is easy to pick a poverty measure. It might be even easier to pick a handful. 

But what is the point unless there is a policy in mind to address the problem?

 

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