Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/268926 
Year of Publication: 
2022
Series/Report no.: 
JRC Working Papers in Economics and Finance No. 2021/4
Publisher: 
European Commission, Ispra
Abstract: 
This paper explores the feasibility of calculating absolute poverty lines on the basis of minimum food expenditures in developed countries. It makes three important contributions. First, it demonstrates that standard statistical methods used in the developing world deliver either inadequate poverty estimates in rich countries characterised by a relatively low food expenditure share. Second, it proposes a new simulation-based method that focuses on the non-food Engel curve and uses available food reference budgets not as inputs but as targeted reference points for the calculations. Finally, an empirical application of the new method using household budget survey data from Italy shows that resulting poverty estimates are in line with the official figures of the Italian Statistical Office in terms of both the poverty rate and the poverty profiles. The proposed method is therefore well suited to produce robust and consistent absolute poverty measures in a large number of developed countries.
Subjects: 
absolute poverty measurement
household expenditures
statistical modeling
JEL: 
C10
C63
D12
E20
G50
I32
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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