Is it cash that the deprived are short of?

In using census data, a range of indicators is commonly used to indicate deprivation. This paper examines the validity of these indicators by exploring how well they predict income in surveys (the Family Expenditure Surveys of 1983 and 1990 and the General Household Survey of 1984) which also collect income data. A reasonably parsimonious set of seven socioeconomic variables (as well as controls for age, sex and region) explains about 40% of the variation in log-income. Our results provide a set of weights for a deprivation index and offer no support for the practice of assigning equal weights to the indicators. A census-based proxy would miss a sizable minority of the actual poor and misclassify some with higher incomes. A majority of the 'deprived' are poor by a cash yardstick, but some are not.