Using the Market Basket Measure to Discuss Income Inequality from the Perspective of Basic Needs

Abstract

The Market Basket Measure (MBM) has been increasingly positioned in Quebec and Canada since 2009 as a metric to follow situations of poverty. This article shows that this measure, linked more specifically to the coverage of basic needs, can be used to design three indicators which acknowledge the whole range of income inequalities and the associated disparities in quality of life: (1) the distance from the MBM; (2) the number of baskets available to households; and (3) the components of after-tax income in relation to the MBM. These indicators can complement existing income inequality measures and inform public debates on socio-economic policy while leaving space for further research about the continuum between poverty and non-poverty. As they express and describe the distribution of after-tax income, a component of national economic accounts, among households along a vital guideline of basic needs coverage, they can contribute to a better understanding of quality of life and sustainability issues between the macro and micro levels of social organisation.