Dictionary, Census of Population, 2016
Market Basket Measure (MBM)Dictionary, Census of Population, 2016
Market Basket Measure (MBM)

Definition

Market Basket Measure refers to the measure of low income based on the cost of a specific basket of goods and services representing a modest, basic standard of living developed by Employment and Social Development Canada (ESDC). The threshold represents the costs of specified qualities and quantities of food, clothing, footwear, transportation, shelter and other expenses for a reference family of two adults and two children. The square root of economic family size is the equivalence scale used to adjust the MBM thresholds for other family sizes.

The MBM basket (2011-base) is priced for 50 different geographic areas - 19 specific communities and 31 population centre size and province combinations. The MBM recognises the potential differences in the cost of the basket between similar-sized communities in different provinces and between different geographical regions within provinces. These thresholds are presented in Table 4.5 Market Basket Measure (MBM) thresholds for economic families and persons not in economic families, 2015, Dictionary, Census of Population, 2016.

The income measure used to compare against the MBM thresholds is the disposal income for the MBM. When the disposable income for the MBM of an economic family member or a person not in economic family falls below the threshold applicable to the person, the person is considered to be in low income according to MBM. Since the MBM threshold and disposable income are unique within each economic family, low-income status based on MBM can also be reported for economic families.

For the 2016 Census, the reference period is the calendar year 2015 for all income variables.

Statistical unit(s)

Person
Economic family

Classification(s)

Not applicable

Reported in

2016 (25% sample), 2011^{Note 1} (30% sample).

Reported for

Economic families and persons not in economic families aged 15 years and over in private households where low-income concepts are applicable (see Remarks).

Question number(s)

Not applicable

Responses

Not applicable

Remarks

The first MBM basket and disposable income definitions were established in 2000 by a working group of federal, provincial and territorial officials, led by Human Resources and Skills Development Canada (HRSDC). Since then, there have been several revisions including the 2009/2010 comprehensive review (leading to the 2008-base) and subsequent revision to the shelter component (leading to the 2011-base). The MBM thresholds are based on the cost of a specific basket of goods and services representing a modest, basic standard of living in the base-year.

The MBM thresholds (2011-base) used by the Census Program reflect the cost of purchasing the following items:

• A nutritious diet as specified in Health Canada's 2008 National Nutritious Food Basket.
• A basket of clothing and footwear required by a family of two adults and two children.
• Shelter cost as the median cost of two- or three-bedroom rental units including electricity, heat, water and appliances.
• Transportation costs, using public transit where available or costs associated with owning and operating a modest vehicle where public transit is not available.
• Other necessary goods and services.

The MBM is updated annually for price changes in the basket, and ESDC rebases the MBM basket periodically by examining the methodology of constructing the basket and disposable income.

While ESDC is responsible for defining the components of the basket and the related concepts, Statistics Canada is responsible for the costing of the components and producing low-income statistics.

The Market Basket Measure is one of a series of low-income lines used in the census. Since the MBM is defined for 50 different geographic areas, it is more sensitive than other low-income lines to geographical variations in the cost of many typical items of expenditure.

Note that the Market Basket Measure (MBM) is only available from the sampled population.

See also low-income status; prevalence of low income; low-income gap; low-income gap ratio and disposable income for the MBM.

Low-income concepts do not apply to the full population. For example, persons living in collective households are excluded from the concepts because their living arrangements and expenditure patterns can be quite different from those of persons living in private households.

The low-income concepts are also not applied in the territories and in certain areas based on census subdivision type (such as Indian reserves). The existence of substantial in-kind transfers (such as subsidized housing and First Nations band housing) and sizeable barter economies or consumption from own production (such as product from hunting, farming or fishing) could make the interpretation of low-income statistics more difficult in these situations.

Since their initial publication, Statistics Canada has clearly and consistently emphasized that the low-income lines are not measures of poverty. Rather, low-income lines reflect a consistent and well-defined methodology that identifies those who are substantially worse off than average. These measures have enabled Statistics Canada to report important trends, such as the changing composition of those below the low-income lines over time.

For additional information on various low-income concepts, see 'Low income lines,' from the Income Research Paper Series (Catalogue no. 75F0002M).

For additional information about data collection method, coverage, reference period, concepts, data quality and intercensal comparability of the income data, refer to the Income Reference Guide, Census of Population, 2016.

Note