Financial and Multidimensional Poverty in European Countries: can the former be used as a proxy of the latter?
AbstractIn recent years, European policy has come to include the fight against poverty and social exclusion. In the context of the Open Method of Coordination, common indicators of poverty were developed. Often, these indicators are a function of household income. In the scientific literature, by contrast, the multidimensional measurement of poverty has taken on a new lease of life. This paper aims at bridging this gap between science and policy. Can the financial measure of poverty be taken as a proxy of a multidimensional measure of poverty? The answer to this question is found in several steps. First of all, an alternative multidimensional measure of poverty is presented and applied to the data of the ECHP of various European countries. Next, the results of this measure are compared with those of financial poverty. More specifically, the causes of multidimensional and financial poverty and those individuals at risk of multidimensional and financial poverty, are compared. The broad conclusions are, first of all, that financial poverty rates often are higher than multidimensional poverty rates. Secondly, the results of both measures of poverty very seldom contradict, so financial poverty can indeed be used as a proxy of multidimensional poverty. However, and that is the third conclusion: the position of some groups in terms of their risk of poverty is underestimated by the financial poverty measure: this is notably the case for those who are single with children, and those with a precarious health situation.
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Bibliographic InfoPaper provided by IRISS at CEPS/INSTEAD in its series IRISS Working Paper Series with number 2003-13.
Length: 33 pages
Date of creation: Nov 2003
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More information through EDIRC
multidimensional poverty ; financial poverty ; comparison;
Find related papers by JEL classification:
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-12-07 (All new papers)
- NEP-EDU-2003-12-07 (Education)
- NEP-EEC-2003-12-07 (European Economics)
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