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By measuring poverty we can find out how much poverty exists in our society, identify which groups are most affected by poverty and monitor changes in its level and distribution.
The most common method of measuring poverty is by a survey in which a representative sample of people are asked to answer questions on their income and spending.
A person is considered poor if either income or spending falls below some minimum level that represents basic needs in each society. This is called the poverty line. The poverty line is not the same everywhere because it is relative to what is the norm in a particular country.
In Ireland, poverty data is collected by the Central Statistics Office using the EU Survey on Income and Living Conditions (EU-SILC) which is conducted annually. The measures most commonly used by the CSO to calculate the number of people in poverty are Relative Income Poverty and Consistent Poverty. Using a combination of these measures gives us a more comprehensive picture of poverty in Ireland.
Relative Income Poverty
This is also known as relative poverty, income poverty or risk of poverty. It is measured by setting a relative income poverty line, which shows how an individual's or household's income compares to the average. This line is usually set at a level between 40% and 70% of the average income.
Often, median income may be used rather than mean or average income as it gives a more accurate reflection of income levels - average income figures tend to be distorted by very high incomes at the top end of the scale.
In Ireland, relative income poverty is measured by calculating the median income - the mid-point on the scale of all incomes in the State from the highest to the lowest - and setting the line at 60% of the median. People whose incomes fall below this line are said to be at risk of poverty. The most recent figures show 14.1% of the population at risk of poverty.
This takes account of access to resources other than income. A deprivation index of items and activities that are generally taken to be the norm in a particular society is compiled, usually by the organisation responsible for collecting poverty data.
People who are denied, through lack of income, items or activities on this list are regarded as experiencing relative deprivation. It is important to distinguish between enforced deprivation such as this and people making choices not to have these items.
In Ireland, 11 basic items are used to construct the deprivation index:
This is also known as the combined income-deprivation measure of poverty. It combines relative income poverty with relative deprivation. People whose income falls below the relative income poverty line and who also experience relative deprivation are regarded as living in consistent poverty.
This is one of the methods used to measure poverty in Ireland: the figure for relative or at risk of poverty is combined with the deprivation indicators above to calculate the rate of consistent poverty, which is currently 5.5% of the population.
Apart from the measures above which are commonly used in Ireland and Europe, a number of other measures are used internationally:
Budget Standard Approach: a poverty line is calculated based on the cost of a specific basket of goods and services that are considered by experts, to represent a basic living standard.
Food Ratio Method: where the poor are distinguished from the non-poor by the proportion of their money spent on necessities such as food, clothes and shelter.
Social Security Poverty Line: when lowest level of social welfare payment is used as equivalent to a poverty line.
United Nations Poverty Index: combines measures such as life expectancy, literacy, long-term unemployment and relative income.
Our Statistics on Poverty page has pointers to other sources of statistical information on social exclusion in Ireland, such as housing, social welfare and comparative data.
The Central Statistics Office has comprehensive information on the EU-SILC survey, the methodologies used, and the results to date on its website at www.cso.ie/eusilc.
Prior to 2003, poverty data was collected by the Economic and Social Research Institute using the Living in Ireland Survey (LIS). Information on the LIS is available on the ESRI website www.esri.ie. Note the results of the LIS are not directly comparable with EU-SILC as the survey methods are different.
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