--- canonical_url: "https://csls.ca/research/sensitivity-of-the-index-of-economic-well-being-to-different-measures-of-poverty-lico-vs-lim/" title: "Sensitivity of the Index of Economic Well-Being to Different Measures of Poverty: LICO vs LIM" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-02T12:52:58+00:00" date_modified: "2026-07-02T12:52:58+00:00" post_type: "research" summary: "" post_tag: - "Canada" - "economic well-being" - "IEWB" - "Index of Economic Well-Being" - "inequality" - "LICO" - "LIM" - "low income" - "poverty measurement" country_focus: - "Canada" province_region: - "National" research_theme: - "Economic Well-Being" - "Productivity and Economic Measurement" featured_image: "https://csls.ca/wp-content/uploads/2026/07/old-reports_hero_banner_bg.webp" status: "publish" --- # Sensitivity of the Index of Economic Well-Being to Different Measures of Poverty: LICO vs LIM Canonical URL: https://csls.ca/research/sensitivity-of-the-index-of-economic-well-being-to-different-measures-of-poverty-lico-vs-lim/ # Sensitivity of the Index of Economic Well-Being to Different Measures of Poverty: LICO vs LIM [Download full PDF report](https://csls.ca/pdf/csls2015-10-1.pdf) Cite this report × Cite this report as: Andrews, Brendon. 2015. “Sensitivity of the Index of Economic Well-Being to Different Measures of Poverty: LICO vs LIM.” CSLS Research Report 2015-10. Ottawa: Centre for the Study of Living Standards. https://csls.ca/research/sensitivity-of-the-index-of-economic-well-being-to-different-measures-of-poverty-lico-vs-lim/ ## Author: - Brendon Andrews Centre for the Study of Living Standards (CSLS) ## Report 2015-10 August 2015 39 pages ## Related research [Measuring the Appropriate Outcomes for Better Decision-Making: A Framework to Guide the Analysis of Health Policy Matthew Calver March 2016 | Report 2016-03 | 132 pages](https://csls.ca/research/measuring-the-appropriate-outcomes-for-better-decision-making-a-framework-to-guide-the-analysis-of-health-policy-2016-03/) [Living Standards Domain of the Canadian Index of Wellbeing Andrew Sharpe, Christopher Ross November 2011 | Report 2011-17 | 124 pages](https://csls.ca/research/living-standards-domain-of-the-canadian-index-of-wellbeing-2011-17/) [Productivity: Key to Economic Success Centre for the Study of Living Standards (CSLS) March 1998 | Report 1998-01 | 99 pages](https://csls.ca/research/productivity-key-to-economic-success/) [Apprenticeship in Canada: A Training System Under Siege? 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The LICO, an absolute definition of poverty, also exhibited greater cyclical variation than the LIM, a relative definition of poverty. The IEWB appears to reflect these trends. Real income growth was determined to be a key factor in explaining these trends because absolute poverty lines remain fixed while relative poverty lines shift in response to changes in real income. The report concludes that there is a significant difference in the growth rate of the IEWB between measures, although not as large as it would be in the absence of linear scaling methodology. Consequently, the use of the LIM instead of the LICO results in a downward bias on economic well-being growth in Canada. The choice of the ‘appropriate poverty measure’ therefore has significant consequences for the discussion of trends in economic well-being. Ce rapport utilise un exercice semblable à la statique comparative pour montrer que le taux de croissance de l’Indice de bien-être économique (IBEE) pour la période 1981-2011 était nettement plus élevé lorsque la pauvreté était mesurée à l’aide des seuils de faible revenu (SFR) de Statistique Canada que lorsqu’elle était mesurée à l’aide des mesures de faible revenu (MFR) de Statistique Canada. Le SFR, une définition absolue de la pauvreté, a également affiché une variation cyclique plus marquée que la MFR, une définition relative de la pauvreté. L’IBEE semble refléter ces tendances. La croissance du revenu réel s’est révélée être un facteur clé pour expliquer ces tendances, puisque les seuils de pauvreté absolus demeurent fixes tandis que les seuils de pauvreté relatifs évoluent en fonction des variations du revenu réel. Le rapport conclut qu’il existe une différence significative dans le taux de croissance de l’IBEE entre les deux mesures, bien que cette différence soit moins marquée qu’elle ne le serait en l’absence d’une méthodologie de mise à l’échelle linéaire. Par conséquent, l’utilisation de la MFR plutôt que du SFR entraîne un biais à la baisse dans la croissance du bien-être économique au Canada. Le choix de la « mesure de pauvreté appropriée » a donc des conséquences importantes pour la discussion des tendances du bien-être économique. [Download full PDF report](https://csls.ca/pdf/csls2015-10-1.pdf)