The choice between consumption and income depends on the purpose of the analysis. In the case of poverty measurement, the answer depends on which of two different conceptions we espouse. The first concept is concerned with the standard of living; the second concept is concerned with the right to a minimum level of resources. Historically, studies of poverty have adopted the first approach, and those that measured income did so on the grounds that low levels of income allowed little scope for saving, so that the income provided a good basis for measuring consumption. [...] The difference between the two approaches can be illustrated by the measurement of poverty for men and women. On a standard-of-living approach it may be legitimate to set different poverty lines for men and women, on the grounds that women have smaller nutritional needs, and this was indeed the case with the US official poverty line in its early years. [...] On a minimum-rights approach, such differentiation would be unacceptable.

The use of consumer spending as an indicator of poverty or overall inequality is open to the objection that spending, like income, is a means to an end. Crucial inequalities can arise in the process of consumption: in the activity of converting money into goods and services. These include differential access to goods and services on account of different prices [...]