Moving from Relative to Material Deprivation in the Sociological Study of Economic Wellbeing

The sociological study of economic wellbeing is dominated by aggregate measures of relative deprivation, namely, the Gini Index and the poverty rate, both of which are based on economic distances from the population median. Using the case of Hong Kong, this article demonstrates the limitations of relative deprivation: the Gini Index is poorly sensitive to concurrent income changes on upper and lower bounds and masks social mobility and the conventional poverty rate is found to fail to capture growing economic pressures during times of crisis and understate actual poverty by about half. This article argues instead for the study of poverty as an expression of material deprivation to study economic wellbeing, proposing for the task a novel approach to measure poverty based on costs of living, which is demonstrated to depict a more accurate poverty rate that captures the shortfall of poor households missed by conventional measures.