Six Economic resources
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Paul Spicker
Abstract
Resources are generally interpreted in terms of income and wealth. Income is what comes in – the flow of resources. Expenditure is what goes out. Wealth is a stock of goods, including both things with a monetary value, like bank accounts and pension rights, and things that can be bought and sold, like housing or clothing.
Most poverty research focuses on income or expenditure rather than wealth. Both income and expenditure are related to the flow of resources. Income is more commonly used in research, because information about income is more commonly available, but the arguments about whether expenditure is preferable to income are specialised, and often subtle. Expenditure is closely related to consumption – how a person obtains goods, services and commodities. Stein Ringen suggests that ‘Poverty can be defined and measured either directly (in terms of consumption) or indirectly (in terms of income)’.63 Because consumption is more closely related to need, he suggests, it is more ‘direct’ than the use of income. Measuring consumption is arguably a more practical approach for measurement of poverty in developing countries, where the nature of the informal economy means it may be easier to examine aspects of consumption (like nutrition) than formal income. But similar arguments have also been applied in developed countries. A recent report by the Institute for Fiscal Studies has modelled poverty in the UK in terms of expenditure rather than income. They argue that expenditure patterns do not show the same short-term fluctuations that income does, and that using figures for expenditure may be more reliable as a guide to people’s resources over time.
Abstract
Resources are generally interpreted in terms of income and wealth. Income is what comes in – the flow of resources. Expenditure is what goes out. Wealth is a stock of goods, including both things with a monetary value, like bank accounts and pension rights, and things that can be bought and sold, like housing or clothing.
Most poverty research focuses on income or expenditure rather than wealth. Both income and expenditure are related to the flow of resources. Income is more commonly used in research, because information about income is more commonly available, but the arguments about whether expenditure is preferable to income are specialised, and often subtle. Expenditure is closely related to consumption – how a person obtains goods, services and commodities. Stein Ringen suggests that ‘Poverty can be defined and measured either directly (in terms of consumption) or indirectly (in terms of income)’.63 Because consumption is more closely related to need, he suggests, it is more ‘direct’ than the use of income. Measuring consumption is arguably a more practical approach for measurement of poverty in developing countries, where the nature of the informal economy means it may be easier to examine aspects of consumption (like nutrition) than formal income. But similar arguments have also been applied in developed countries. A recent report by the Institute for Fiscal Studies has modelled poverty in the UK in terms of expenditure rather than income. They argue that expenditure patterns do not show the same short-term fluctuations that income does, and that using figures for expenditure may be more reliable as a guide to people’s resources over time.
Chapters in this book
- Front Matter i
- Contents iii
- Preface iv
- Acknowledgements vii
- About the author viii
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Understanding poverty
- Defining poverty 3
- Poverty in different societies 11
- Understanding the figures 19
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Poverty as material need
- Concepts of need 29
- Area deprivation 37
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Poverty as economic position
- Economic resources 45
- Class 53
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Poverty and social relationships
- Social exclusion 65
- Dependency 73
- Poverty and politics 83
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Poverty as a moral concept
- The moral dimensions of poverty 93
- The moral condemnation of the poor 101
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Explanations for poverty
- Why people are poor 111
- Why poor countries stay poor 121
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Responses to poverty
- Responding to poverty 135
- Policies for poverty 143
- Notes 153
- Index 173
Chapters in this book
- Front Matter i
- Contents iii
- Preface iv
- Acknowledgements vii
- About the author viii
-
Understanding poverty
- Defining poverty 3
- Poverty in different societies 11
- Understanding the figures 19
-
Poverty as material need
- Concepts of need 29
- Area deprivation 37
-
Poverty as economic position
- Economic resources 45
- Class 53
-
Poverty and social relationships
- Social exclusion 65
- Dependency 73
- Poverty and politics 83
-
Poverty as a moral concept
- The moral dimensions of poverty 93
- The moral condemnation of the poor 101
-
Explanations for poverty
- Why people are poor 111
- Why poor countries stay poor 121
-
Responses to poverty
- Responding to poverty 135
- Policies for poverty 143
- Notes 153
- Index 173
