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Comparison of poverty rates measured before and after housing costs

PovertyHow has it changed?Housing & homelessness

This graph allows us to gauge the impact of trends in housing costs on poverty. 

The difference in poverty rates measured using these two poverty lines shrunk from 3.5 percentage points in 1999 to 2.1 percentage points in 2007. This suggests that the increase in poverty during that period was mainly due to
greater disparities between low and middle-incomes, rather than changes in housing costs. After 2007, this pattern was reversed. The difference in poverty rates measured using the two poverty lines grew from 2.1 percentage points in 2007 to 4.7 percentage points in 2017. This suggests that the stabilisation of poverty rates after 2007 when housing costs were deducted from incomes (red line – top) was mainly due to increasing disparities in the housing costs of low and middle income households. As shown by the blue (lower) line, poverty declined over this period when measured before deducting housing costs. So, increasing disparities in housing costs played a major role in keeping the overall poverty rate at around 12-13% from 2009 to 2017, when it would otherwise have declined.

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