B0685
Title: Small area estimation of monetary poverty indicators with poverty lines adjusted using local price indexes
Authors: Francesco Schirripa Spagnolo - Università di Pisa - Dipartimento di Economia e Management (Italy) [presenting]
Stefano Marchetti - Dipartimento di Economia e Management, Universita di Pisa (Italy)
Caterina Giusti - Centro Dagum c/o Dip. Economia e Management, University of Pisa (Italy)
Monica Pratesi - University of Pisa (Italy)
Gaia Bertarelli - University Ca Foscari Venezia (Italy)
Luigi Biggeri - University of Florence (Italy)
Abstract: Estimating economic poverty indicators at the local level is essential for well-targeted, data-driven welfare policies. However, Italy is a country characterized by strong geographical heterogeneity and computing these indicators using a national monetary poverty threshold can be misleading because the country's price levels can be unequal among the different areas. A novel approach is proposed to estimating monetary poverty incidence at the provincial level in Italy, considering the country's different price levels. Spatial price indexes (SPIs) are computed using scanner data on retail prices to account for the local prices. The SPIs are estimated by referring to the local mean prices and using the 20th percentile. These two kinds of SPIs adjust the national poverty line when computing the poverty incidence at the provincial level using small area estimation (SAE) models. The findings suggest that adjusting the national poverty line using the SPIs to compute a monetary poverty index can modify the poverty mapping results based on the traditional national poverty line that ignores the price differences.
