The code underlying the Social Metric Commission’s new poverty measure

Emily Harris and Matthew Oakley from the Social Metrics Commission’s Secretariat introduce the release of the code underlying the Commission’s new poverty measure.

Who is the Social Metrics Commission?

The Social Metrics Commission is an independent commission founded in 2016 to develop a new approach to measuring poverty in the UK. Led by the CEO of the Legatum Institute, Baroness Stroud, the Commission’s membership draws on a group of top UK poverty thinkers from different political and professional backgrounds. Currently there is no agreed UK Government measure of poverty and the Commission’s goal is to provide a new consensus around poverty measurement that enables action and informs policy making to improve the lives of people in poverty.

Our landmark report in 2018 proposed a new measure of poverty for the UK and, since then, we have received support from across the political spectrum. The Government has now committed to developing experimental national statistics based on the Commission’s approach.

Aside from analysts in government, we want our measure to be used far and wide, from researchers to charities, media, and policymakers. That is why we have made the code that underpins the creation of the poverty metric freely available to download from our website.

What has the Commission produced?

The Commission’s measure of poverty goes beyond conventional metrics that look only at incomes by also accounting for the positive impact of people’s liquid assets (such as savings, stocks, and shares) on alleviating immediate poverty and the range of inescapable costs that reduce people’s spending power. These inescapable costs include rent or mortgage payments, childcare, and the extra costs of disability.

As well as reporting on the number of families in poverty, our approach also seeks to understand more about the nature of that poverty and families’ experiences. It provides measures of the depth and persistence of poverty, as well as including a range of Lived Experience Indicators that capture issues such as mental and physical health, employment, isolation, and community engagement.

By taking all of these things into account, we believe the new metric reflects more accurately the realities and experiences of those living in poverty than previous measures. If taken up as an agreed measure, it would allow the Government to take meaningful steps to reduce poverty and improve outcomes for those who do experience it and to track the success of these policies.

How can you use the Commission’s work?

The code underlying the Commission’s measure of poverty, along with detailed user guides, can be easily downloaded from our website. It is written in a series of STATA do files and draws on data from the Family Resources Survey (FRS)Households Below Average Income (HBAI), and Understanding Society.

Once the folder for the code is downloaded, users will see that it is arranged in two separate collections of do files according to the data source being used. The first set of code draws on Family Resources Survey (FRS) and related Households Below Average Income (HBAI) data to operationalise the Commission’s core measure of poverty, measures of depth, and selected Lived Experience Indicators. The second set of code draws on Understanding Society data to operationalise the Commission’s measure of persistent poverty and the remaining Lived Experience Indicators.

Within each folder there are a series of individual do files that are coordinated by one master Command File. When you run the Command file it will execute each individual do file, successively building the measure and then producing final results. These results are stored in an Excel spreadsheet that is automatically produced when running the code.

There are also a number of modification options that users can explore in the Command file. You can specify, for example, the name of the data cut you are running so that files are named accordingly, and you can set which years of analysis or which country within the UK the measurement should apply.

Our hope is that analysts and researchers will download our code and use it to replicate our analysis, but will also extend it to further analyse UK poverty based on the Commission’s approach. We look forward to seeing what additional insights others can discover by using our code and building on our analysis.


Matthew Oakley is the Head of Secretariat for the Social Metrics Commission and Director of WPI Economics, an economics and public policy consultancy. He is a respected economist and expert on welfare reform and the future of the welfare state.

Before founding WPI Economics Matthew had been Chief Economist and Head of Financial Services Policy at the consumer champion Which?, Head of Economics and Social Policy at the think tank Policy Exchange and an Economic Advisor at the Treasury. He has an MSc in Economics from University College London, where he specialised in microeconomics, labour markets, public policy and econometrics.

 

Emily Harris is a Senior Analyst for the Social Metrics Commission and is based at the Legatum Institute. She most recently worked in the Social Policy Section at the Commonwealth Secretariat.

Originally from South Africa, Emily was at the University of Cape Town’s Poverty and Inequality Initiative, where she managed a project developing indicators for youth well-being at the small area level. In this post she played a leading role in constructing an index for multidimensional youth poverty and setting up the Youth Explorer data portal. She has also worked as a data analyst on two cash transfer studies in India and consulted as a data manager at a private research company. Emily graduated cum laude with a Masters in Development Studies from the University of KwaZulu-Natal.