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The order of acquisition of assets and deprivation

In: Research Handbook on Measuring Poverty and Deprivation

Author

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  • Joseph Deutsch
  • Jacques Silber

Abstract

The focus of this chapter is on measuring poverty via asset indices. However, rather than using principal components analysis, it recommends deriving an asset index on the base of the notion of the most common order of acquisition of durables or more generally assets. Such an order may be obtained either via the so-called Paroush approach (by applying an algorithm introduced in the mid-1960s) or via Item Response Theory (IRT). The empirical illustration of this chapter is based on data collected by Eurobarometer in 2017 and it covers 26 countries. It confirms that there exists an order of acquisition of assets, that there is not much difference between results derived from the Paroush approach or from IRT. Finally it shows that the correlation between the order of acquisition observed in two countries is negatively related to the absolute value of the gap between their per capita G.D.P, their material deprivation index or their median equivalized income.

Suggested Citation

  • Joseph Deutsch & Jacques Silber, 2023. "The order of acquisition of assets and deprivation," Chapters, in: Jacques Silber (ed.), Research Handbook on Measuring Poverty and Deprivation, chapter 47, pages 511-521, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:20574_47
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