(Mack and Lansley, 1985). The resulting deprivation index was used directly as a measure of poverty: those experiencing "enforced lack" due to budget constraints of 3 or more of the 22 items in their list were deemed poor.10
A conceptual underpinning for a deprivation index approach has been proposed that posits a normative standard, in terms of a fixed set of needed capabilities—for example, the ability to obtain a job, literacy, good health (Sen, 1983, 1989, 1992; see also Atkinson, 1989). The standard is then made operational in a relative manner by determining items that are necessary to achieve these capabilities in a particular time and place: for example, it can be argued that one needs a telephone to be able to obtain a job in modern U.S. society.
Deprivation indexes have their advantages and disadvantages. Like poverty thresholds expressed in monetary terms, they, too, involve difficult questions of choice—How many and which items to include in the list?—and inevitably embody a large element of subjectivity and relativity. Deprivation indexes appear less useful than monetary thresholds as an official measure of poverty for such purposes as determining eligibility for government assistance, but they can broaden understanding of what it means to have less resources than the official thresholds.
Given a set of poverty thresholds, one must then define the resources that are to be counted to determine if each family and individual is above or below the appropriate threshold. Common resource definitions pertain to family income, which is the definition used in the United States and Canada, or to family expenditures (or consumption), which is the definition often used in Europe.
Conceptually, an income definition is more appropriate to the view that what matters is a family's ability to attain a living standard above the poverty level by means of its own resources. Thus, an income definition will not count as poor anyone who had an income above the threshold for the period of measurement, even if he or she consumed less than the poverty level, for whatever reason—pure choice or perhaps because of anticipating a drop in future income. Conversely, an income definition will count as poor anyone who had inadequate income, even if he or she was able to maintain consumption above the poverty level by such actions as borrowing, carrying a credit card balance, or depleting savings. In contrast to an income definition, an expenditure (or consumption) definition is more appropriate to the view that what matters is someone's actual standard of living, regardless of how it is