Poverty Redefined as Low Consumption and Low Wealth, Not Just Low Income

Abstract

This chapter suggests that measures of financial poverty should be based on individuals having low consumption and low wealth, as well as low income. Having set out a case for doing this, it provides revised estimates of poverty based on all three dimensions of economic well-being in Australia. Then, using this extended measure of financial poverty, it reassesses links between poverty and a range of subjective/psychological outcomes relating to life satisfaction, perceived standard of living, personal relationships, and health. After completing the initial analysis for Australia, the robustness of estimates is verified by implementing a similar measure of financial poverty in Germany requiri..