Household Needs and Poverty: with Application to Spain and the UK
We examine the sensitivity of poverty comparisons across countries with dissimilar household needs when equivalence scale parameters are varied. We use a sample of Spanish and British households, using both absolute and relative poverty lines. We sum up these comparisons using subjective confidence levels. We find, inter alia, that although the poor are typically more numerous in Spain than in Britain, the actual headcount differences may vary by up to 10% when needs allowances are altered, even when kept the same across the two countries. Comparisons of poverty composition across the two countries are also very sensitive to the choice of equivalence scale parameters.
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