Relative deprivation, reference groups and the assessment of standard of living

Jacques Silber and Paolo Verme

No 5930, Policy Research Working Paper Series from The World Bank

Abstract: This paper proposes two new indices of relative deprivation, derived from an extension of the concept of the generalized Gini for the measurement of distributional change. Population- and income-weighted relative deprivation indices are then defined and, using panel data from the Consortium of Household Panels for European Socio-Economic Research, this paper checks which of the various ways of defining individual deprivation best fits the answers given by individuals on the degree of their satisfaction with income. The analysis finds that the deprivation indices proposed are consistently and negatively correlated with income satisfaction as reported by respondents, that income weighted measures fit better than population weighted measures, and that this fit improves with countries that experienced deep institutional changes such as the transitional economies of Eastern Europe.

Keywords: Inequality; Economic Theory&Research; Poverty Impact Evaluation; Labor Policies; Emerging Markets (search for similar items in EconPapers)
Date: 2012-01-01
New Economics Papers: this item is included in nep-ltv
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Citations: View citations in EconPapers (8)

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Journal Article: Relative deprivation, reference groups and the assessment of standard of living (2012)
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