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9

Setting the Scene

1
terms
1
notes

B. Atkinson, A. (2015). Setting the Scene. In B. Atkinson, A. Inequality: What Can Be Done?. Harvard University Press, pp. 9-44

an estimate in economic theory of the rent a house owner would be willing to pay to live in his or her own house

32

Owning a home does not yield cash income but has the equivalent effect in that it saves the owner from having to pay rent. For this reason, the application of the comprehensive definition of income indicates that we should impute an income, referred to as "imputed rent."

included in the national accounts, represents about 10% of GDP as of 2012

—p.32 by Anthony B. Atkinson
notable
2 years, 7 months ago

Owning a home does not yield cash income but has the equivalent effect in that it saves the owner from having to pay rent. For this reason, the application of the comprehensive definition of income indicates that we should impute an income, referred to as "imputed rent."

included in the national accounts, represents about 10% of GDP as of 2012

—p.32 by Anthony B. Atkinson
notable
2 years, 7 months ago
35

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 [...]

consumption inequalities: more expensive supermarkets; higher energy prices/rent; non-availability of goods and services like loans; spatial differences like access to healthcare or parks or education

—p.35 by Anthony B. Atkinson 2 years, 7 months ago

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 [...]

consumption inequalities: more expensive supermarkets; higher energy prices/rent; non-availability of goods and services like loans; spatial differences like access to healthcare or parks or education

—p.35 by Anthony B. Atkinson 2 years, 7 months ago