Economics at your fingertips  

Estimation of Joint Income-Wealth Poverty: A Sensitivity Analysis

Sarah Kuypers () and Ive Marx ()
Additional contact information
Sarah Kuypers: University of Antwerp
Ive Marx: University of Antwerp

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2018, vol. 136, issue 1, 117-137

Abstract: Abstract Most poverty studies build on measures that take account of recurring incomes from sources such as labour or social transfers. However, other financial resources such as savings and assets also affect living standards, often in very significant ways. Previous studies that have sought to incorporate assets into poverty measures agree that (1) poverty estimates including wealth are considerably lower than the traditional income-based measures; (2) poverty rates of the elderly are more affected than those of the non-elderly and (3) poverty rates are especially affected by the household’s main residence. This paper assesses the sensitivity of these conclusions to various plausible alternative assumptions, such as the poverty line calculation, the types of assets included in the wealth concept and choices with respect to the equivalence scale. Moreover, we check whether the impact of alternative assumptions is consistent across age and institutional settings. To that effect we compare Belgium and Germany, two countries with similar living standards and income poverty rates, but very different levels and distributions of wealth. Using data from the Eurosystem Household Finance and Consumption Survey we show that accounting for wealth affects the incidence and age structure of poverty in a very substantial way. However, we also illustrate that results strongly depend on all kinds of measurement choices. We show that poverty rates may increase as well as decrease depending on how wealth is accounted for. Cross-country rankings may also change, overall or for specific groups. Second, current measures are not representative for young households such that any conclusion on the age ratio of poverty is highly sensitive to the assumptions made.

Keywords: Income; Wealth; Poverty measurement; Sensitivity analysis (search for similar items in EconPapers)
JEL-codes: I32 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

Access Statistics for this article

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement is currently edited by Filomena Maggino

More articles in Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement from Springer
Bibliographic data for series maintained by Sonal Shukla ().

Page updated 2019-05-21
Handle: RePEc:spr:soinre:v:136:y:2018:i:1:d:10.1007_s11205-016-1529-5