Consumption is often a better indicator of people’s actual living standards than is income. One of the obvious benefits it has in social policymaking is that it helps better understand the needs, both met and unmet, of households of different income levels. The use of consumption as an indicator gains added significance when it comes to the living conditions of low-income households. For one thing, low-income households, as compared to their higher income counterparts, are a group whose income often gets difficult to verify, as they are more exposed to the risk of precarious employment. For another, consumption as compared to income better captures the varying needs of low-income households at the same income level but of different compositions and sizes.
