As one of the originators of Canada’s market basket measure (MBM), developed with my colleague Michael Hatfield, I was interested to read the argument for complementing it with a material deprivation index (MDI) to better measure poverty, as outlined recently in Policy Options by Richard Matern, Dana Vreeswijk and Sofia Seer.

They are onto something important. With a few caveats.

Canada would benefit from incorporating a well-designed material deprivation measure into its understanding of poverty. But the strongest argument for the MDI is not that it reveals the inadequacy of the market basket measure. It is that it tells us something the MBM was never designed to tell us.

The MBM asks a relatively straightforward question: does a family have enough disposable income to afford a specified basket of goods and services representing a modest, basic standard of living in its community?

Canada is too rich to be failing this badly on economic and social rights Reducing poverty means looking at all its complexities Don’t miss the good news on poverty reduction in 2025

Canada is too rich to be failing this badly on economic and social rights

Reducing poverty means looking at all its complexities

Don’t miss the good news on poverty reduction in 2025

That made the poverty threshold concrete. Rather than defining poverty simply by a position in the income distribution, the MBM connects income to the cost of necessities. It also lets us examine what happens to families after taxes and transfers, and therefore lets us evaluate an........

© IRPP - Policy Options