Income, Deprivation and Poverty: A Longitudinal Analysis

Indices of material deprivation are of increasing interest in Britain and the EU as potential markers of poverty, as an alternative, or complement, to measures of low income. This is the first panel regression analysis of the relationship between households' incomes and deprivation scores over time. We show a close underlying link (people with long-term low incomes report long-term deprivation), but only a weak dynamic link (people whose income increases do not always report a commensurate fall in deprivation). The implications for poverty measurement are important both to academic analysts and to policy-makers.