Changes in material deprivation and household income

The changes over the four years in the proportion of people identified as being materially deprived - and in particular the large reduction in a number of the EU12 countries - are reasonably closely related to changes in the real income of households, which lends added credence to the results. In particular, those countries in which the proportion of people identified as being materially deprived declined considerably over the period - the three Baltic States especially - are also those in which there was a substantial increase in household real income (see Figure 3).

Figure 3: Change in the proportion of people identified as materially deprived and change in median household disposable income at constant prices, 2005 to 2009

Similarly, those countries in which the proportion of materially deprived people increased over the period tended to be those where real household disposable income increased relatively little - Austria, Italy, Germany and Portugal. The main exceptions are Ireland and Slovenia, in the former of which, as noted above, the increase in material deprivation might reflect the onset of the crisis (note that the income figures for Ireland - unlike other countries - relate to the 12 months before the survey was conducted, instead of to the previous calendar year).

It should be noted that the relationship between material deprivation and real income does not necessarily imply anything about its relationship with the risk of poverty. An increase in median household income may be associated with the risk of poverty remaining unchanged, declining or even increasing, depending on the distribution of the rise in income between households, whether it is more concentrated on those at the bottom end of the scale or further up. Accordingly, the relationship between a reduction in the extent of material deprivation and the risk of poverty can equally vary, which is precisely why an indicator of material deprivation is a useful complement to an indicator of relative poverty.