How can deprivation indicators help us to understand poverty?

This article challenges the growing orthodoxy among analysts and makers of social policy that an index of material deprivation should be preferred to low income as a measure of poverty. Such scales are nevertheless invaluable as indicators of living standards, and can be used to improve our understanding of social exclusion, and the role of low income in that process. Income and deprivation data from seven waves of the British Household Panel Survey are used to show that poverty may be less common, but also more severe, more stable and more intransigent, than standard annual income tables indicate. These lessons are applied to a discussion of the government's plan to introduce a deprivation index into its suite of child poverty measures.