A variable that acts as a substitute for an unobserved explanatory variable in a model. Such variables are often used when it is infeasible or too expensive to use a more relevant operational measure. For example, income is often used as a measure of ability to purchase even though it does not fully capture that concept because ability to purchase depends also on wealth, unreported income, gifts, theft, and subsidies. In 1999, for example, it was estimated that poverty-level families in the U.S. (based on income) consume almost twice their income (because of government subsidies, gifts, theft, and unreported income).