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Financial and Multidimensional Poverty in European Countries: can the former be used as a proxy of the latter?

Author

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  • Dekkers, Gijs

    (Federal Planning Bureau, Belgium, University of Leuven, Belgium)

Abstract

In 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.

Suggested Citation

  • Dekkers, Gijs, 2003. "Financial and Multidimensional Poverty in European Countries: can the former be used as a proxy of the latter?," IRISS Working Paper Series 2003-13, IRISS at CEPS/INSTEAD.
  • Handle: RePEc:irs:iriswp:2003-13
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    File URL: http://iriss.ceps.lu/documents/irisswp41.pdf
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    References listed on IDEAS

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    1. Slottje, Daniel J, 1991. "Measuring the Quality of Life across Countries," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 684-693, November.
    2. Böhnke, Petra & Delhey, Jan, 1999. "Poverty in a multidimensional perspective: Great Britain and Germany in comparison," Discussion Papers, Research Unit: Social Structure and Social Reporting FS III 99-413, Social Science Research Center Berlin (WZB).
    3. Kai-yuen Tsui, 2002. "Multidimensional poverty indices," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 19(1), pages 69-93.
    4. Bengt Muthén & Anders Christoffersson, 1981. "Simultaneous factor analysis of dichotomous variables in several groups," Psychometrika, Springer;The Psychometric Society, vol. 46(4), pages 407-419, December.
    5. Anthony B. Atkinson & Eric Marlier & Brian Nolan, 2004. "Indicators and Targets for Social Inclusion in the European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 42(1), pages 47-75, February.
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    Cited by:

    1. Cielito F. Habito, 2010. "Patterns of Inclusive Growth in Developing Asia: Insights from an Enhanced Growth-Poverty Elasticity Analysis," Working Papers id:3076, eSocialSciences.
    2. Keetie Roelen & Geranda Notten, 2011. "The Breadth of Child Poverty in Europe: An investigation into overlap and accumulation of deprivations," Papers inwopa636, Innocenti Working Papers.
    3. Aysenur Acar, 2014. "The Dynamics of Multidimensional Poverty in Turkey," Working Papers 014, Bahcesehir University, Betam.
    4. Geranda Notten & Keetie Roelen, 2010. "Cross-national comparison of monetary and multidimensional child poverty in the European Union: puzzling with the few pieces that the EUSILC provides," Brooks World Poverty Institute Working Paper Series 13510, BWPI, The University of Manchester.
    5. Dekkers, Gijs, 2008. "Are the old poor? A discussion and some cursory evidence," MPRA Paper 29436, University Library of Munich, Germany.

    More about this item

    Keywords

    multidimensional poverty ; financial poverty ; comparison;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, 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

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