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A comparative evaluation of poverty measures in the Italian Survey of Household Income and Wealth

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  • Giovanni D'Alessio

Abstract

I provide a comparative study of the most frequently used poverty indices,obtained by modifying the welfare indicator (income, consumption, income and/or wealth),the equivalence scale (OECD or square root of the number of components), local deflatorsand the statistic for the poverty threshold (average or median). I also examine the EquivalentEconomic Situation Index (ISEE is the Italian acronym), an administrative indicator used toaccess social benefits that combines income and assets and has a specific equivalence scale.Using data from the Bank of Italy’s surveys of household income and wealth (SHIW) I firststudy how the incidence of poverty varies according to different combinations of welfare indicators,equivalence scales and poverty thresholds; subsequently I investigate how the differentvariants are associated with an indicator of perceived bad economic conditions. The investigationyields a wide variety of results as for the poverty rate and the composition of the poor.The highest association with the perceived poor economic conditions is found for indicatorscombining income and wealth; the association with consumption is rather weak.

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  • Giovanni D'Alessio, 2020. "A comparative evaluation of poverty measures in the Italian Survey of Household Income and Wealth," Politica economica, Società editrice il Mulino, issue 1, pages 101-140.
    • Handle: RePEc:mul:je8794:doi:10.1429/97787:y:2020:i:1:p:101-140
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    More about this item

    Keywords

    income; consumption; wealth; poverty; equivalence scales; spatial deflator; ISEE.;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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