Endnotes
1. Between 1990 and 2000, household disposable income rose 36 per cent compared to 18 per cent for the Consumer Price Index [CPI] (Greenwell, Lloyd & Harding 2001, p. 22). This is why the HPL shows a higher proportion of Australians living in poverty than other measures (Harding, Lloyd & Greenwell 2001, p. 37). In 2002, the HPL was about 35 per cent higher than it would have been if it had been updated with the CPI (Melbourne Institute of Applied Economic and Social Research 2002).
2. The HES cash flow questions were as follows:
Over the last 12 months, which of the following best describes your household's financial situation?
- Spend more money than we get
- Just break even most weeks
- Able to save money most weeks
If all of a sudden you had to get $2,000 for something important, could the money be obtained within a week?
- Yes
- No
Over the past year have any of the following happened to your household because of a shortage of money?
- Could not pay electricity, gas or telephone bills on time
- Could not pay for car registration or insurance on time
- Pawned or sold something
- Went without meals
- Unable to heat home
- Sought assistance from welfare/community organisations
- Sought financial help from friends or family
3. The GSS question wording was as follows:
In the last 12 months, have any of these happened to you/members of this household because (any of) you were short of money?
Interviewer: If 'yes', prompt for which ones. More than one response is allowed. Press space bar between.
- Could not pay electricity, gas or telephone bills on time
- Could not pay mortgage or rent payments on time
- Could not pay for car registration or insurance on time
- Could not make minimum payment on credit card
- Pawned or sold something because you needed cash
- Went without meals
- Were unable to heat your home
- Sought financial assistance from friends or family
- Sought assistance from welfare or community organisations
- No/none of these
- Don't know
4. A list of occupations and their ANU4 occupational status scores is available at <http://www.dest.gov.au/archive/highered/eippubs/eip02_4/appendix_02.htm>.
5. A superior but more time-consuming procedure would be to perform this random selection many times and take the mean of the estimates. However, estimates of percentages and other statistics from the two random selections are very close. There is no difference in the overall estimates of the proportion in poverty, but differences become larger in the smaller categories.
6. In the context of logistic regression, there is no R square or proportion of variance explained which indicates how well the model accounts for variation in the dependent variable. However, the likelihood ratios for the null and predicted models provide a pseudo R square measure. This measure compares the likelihood ratio of the null model to that of the model with predictor variables. Mathematically:
The rescaled R square is the pseudo R square adjusted for the maximum possible R square.
7. Marginal attachment to the labour force is determined by first establishing whether a person not in the labour force has a desire to work, and then by whether they have been actively seeking work or are available to start work within a short period of time. Individuals who are marginally attached may satisfy some, but not all, of the criteria required to be classified as unemployed. Individuals not in the labour force are considered to be marginally attached to the labour force if they:
(i) want to work and are actively looking for work but not available to start work in the reference week; or
(ii) want to work and are not actively looking for work but are available to start work within four weeks.
Individuals not in the labour force are not marginally attached if they:
(i) do not want to work; or
(ii) want to work but are not actively looking for work and are not available to start work within four weeks.
For more details, see the relevant ABS publication (ABS 2001).
8. The exponent of the estimate -0.31 is 0.73. This is the odds ratio for men compared to women. It is more meaningful for the odds ratio to be above 1, so taking the inverse of 0.73 (1.36), the estimate can be interpreted as indicating that the odds of women being in poverty (rather than not in poverty) are 1.4 times the odds for men.
9. This proposition was also tested controlling for unequivalised household income.
10. The Australian public also understands poverty in absolute terms. About 75 per cent of Australian adults define poverty in subsistence terms (Saunders 2004, p. 8). However, there is little consensus on what income level is required not to be in poverty (Saunders 1998a).
11. Saunders (2004) notes that the original HPL was based on the basic wage, whereas the updated HPL is now used to argue for increases in the minimum wage.
12. The factor of three was used because food constitutes about 33 per cent of household expenditure. The contents of the food basket were stipulated according to American nutrition standards (Ringen 1998).
13. In that study, the notional cost of rent was deducted from the incomes of owner-occupiers.
14. Apparently, the budget did not include motor vehicle costs (FaCS 2003).
15. The original OECD equivalence scale assigned a score of 1.0 for the first adult, 0.7 for the second and 0.5 for each child.
16. Oxley et al. (1997, p. 60) note that the international equivalence scale, which adjusts incomes in proportion to the square root of household size, is just one of a number of 'elasticities' for the relationship between household size and income. In the international scale the elasticity is 0.5, but it could theoretically be any value. A value of 1.0 assumes there are no economies of scale, whereas a value less than 0.5 assume stronger economies of scale.
17. Saunders (2004), in his discussion paper on developing a framework for examining poverty, excludes all households with negative incomes since the data may be unreliable. Similarly, in the section on financial disadvantage in the 2002 edition of Measuring Australia's Progress, the ABS (2002b, p. 40) excludes households in the lowest 10 per cent of incomes since they were doubtful about the accuracy of the information.
18. In dwellings that included fewer than four households, all households were selected.
19. For further details on the HILDA survey, including Wave 1 outcomes, see Watson and Wooden (2001) and Wooden, Freidin and Watson (2002).
20. The Internet address is <http://www.melbourneinstitute.com/hilda/sinstruments.html>.
21. 'Split households' are new households created by individuals from households in Wave 1. New households are most often formed by separation and divorce and as a result of young adults leaving the parental home.
22. Further details on the methodology for Wave 2 are available in Watson and Wooden (2004).
23. A Cronbach's alpha over 0.70 is acceptable (Nunnally 1978).