Association for Public Policy Analysis & Management

In Hong Kong, poverty is officially defined as income insufficiency but the economic circumstances of a household also depends on its financial asset holdings. This issue is particularly important for families with older persons because it is more likely that they accumulate certain amount of asset during their working lives. This paper investigates measures of poverty that using income, expenditure and asset as the indicators among Hong Kong older persons. Following the method used in a recent paper (Branoini et al., 2010), we converted the net worth of asset into a constant flow of income, like annuity product. Using a 2014 survey of 4,306 older persons aged 60 and older, it was found that the poverty rate using income with annuity poor was 10% lower than that using income only (26.8% vs 36.4%). The poverty rate defined by the income with annuity was also lower than the poverty rate defined by expenditure (31.1%). Moreover, we have found that education, housing tenure, living arrangement, and health indicators are different for those who are income poor and asset poor. It seems that asset should be considered if we aim to improve the measure of poverty, especially for families with older persons.