Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/61206
Authors: 
Juhász, Andos
Year of Publication: 
2012
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 461
Abstract: 
Poverty line definitions in use often lack a solid scientific foundation. This paper proposes to exploit data on income satisfaction to construct an evidence-based poverty line. The poverty line is identified by using its assumed unique property to explain income dissatisfaction best among all dichotomizations of income. To this end, several model settings are considered including linear and nonlinear approaches both exploiting panel information. Applying the method to data from the German Socio-Economic Panel yields a temporally stable poverty line similar to the definition provided by the Statistical Office of the European Commission. Using data from the European Community Household Panel, we present further evidence for satisfaction-based poverty lines across Europe and investigate their cross-country differences. The appropriateness of focusing on discrete poverty lines is also investigated.
Subjects: 
Household income
poverty line
income satisfaction
JEL: 
D31
I32
Document Type: 
Working Paper

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