Low Income Measurement in Canada: What Do Different Lines and Indexes Tell Us?

This study assesses the existing LICO, LIM, and MBM lines, together with a fixed LIM, by using several distribution sensitive indexes. We found that the low income lines tracked each other well in the long-run. But, in the short-run, they often behaved differently. The same was observed when examining different indexes under the same line. In the long-run, the low income rate, gap, and severity indexes all moved in the same direction. However in the short-run, they sometimes varied in opposite directions, or in the same direction with different magnitudes, suggesting that a single line or index can be misleading in some circumstances.