UNECE Expert meeting on measuring poverty and inequality, Vienna, 29-30 November 2018

Anna Bieńkuńska

Subjective poverty –measurement and interpretation

2stat.gov.pl

It is necessary to distinguish two situations: firstly, the situation when we want to determine if a given unit can be considered as subjectively poor and, secondly, the situation when we want to know surveyed units’ opinions on poverty understood as the social phenomenon, i.e. how they assess the poverty range in the country, what are the causes of poverty, etc. These are two different research problems.

Concepts and methods of measurement

3stat.gov.pl

• The basis for the determination of the subjectivepoverty lines is a self-assessment of the materialstatus/financial situation of the household ora declaration of income necessary to satisfyminimal needs of the household. Subjective poverty lines assessed with the use

of statistical methods Perception of the financial line of poverty

Subjective poverty lines/thresholds

4stat.gov.pl

Examples:

Leyden Poverty Line (LPL) Subjective Poverty Line (SPL) The Centre for Social Policy Poverty Line (CSP)

Subjective „statistical” poverty lines

5stat.gov.pl

This method is based on the Welfare Function of Income (WFI) U(y), whichis derived from a particular survey question, the Income Evaluation Question (IEQ):

'Please try to indicate what you consider to be an appropriate amount foryour household for each of the following cases. Under my/our conditionsI would call an after-tax household income per week/month/year of:• about ..... very bad,• about ..... bad,• about ..... insufficient,• about ..... sufficient,• about ..... good,• about ..... very good.• Please enter an answer on each line and underline the period yourefer to.'

Leyden Poverty Line (LPL)

Source: Subjective Poverty Line Definitions (Flik, van Praag 1991)

6stat.gov.pl

This method states that families are poor if their incomesare not sufficient „to make ends meet” according to theiropinion. This measure is based on on-level attitudequestion - the Minimum Income Question (MINQ):

• 'What do you consider as an absolute minimum net income for a household such as yours? In other words, we would like to know an income amount below which you won't be able to make both ends meet.

• about ..... per week / per month / per year

• Please underline the period you refer to.’

Source: Subjective Poverty Line Definitions (Flik, van Praag 1991)

Subjective Poverty Line (SPL)

7stat.gov.pl

This line uses the MINQ, some standard information, and a special multi-level attitude question which we, forconvenience, call the "Deleeck question" and which reads as follows:

'Can you make ends meet with the actual net income of your household:- with great difficulty,- with difficulty,- with some difficulty,- rather easily,- easily,- very easily?‘

Source: Subjective Poverty Line Definitions (Flik, van Praag 1991)

The Centre for Social Policy Poverty Line (CSP)

8stat.gov.pl

Examples of questions: How do you think, below which income begins

poverty? Please, consider monthly income per person in the familiy. (BS/22/22/97, CBOS Poland)

Perception of the financial line of poverty

9stat.gov.pl

How many pounds a week, after tax, do you thinkare necessary to keep a household such as the one you live in, out of poverty?

How far above that level would you say yourhousehold is?

- A lot above that level of income- A little above- About the same- A little below- A lot below that level of income- Don’t know

Source: PSE survey, UK

Felt poverty/selfassessed subjective poverty

10stat.gov.pl

CountryPoor

Neither poornor rich

Rich Refusal Don't know

%

Italy 15 45 31 7 2

Luxembourg 10 51 34 3 2

Poland 30 47 17 2 4

Romania 36 40 22 1 1

United Kingdom 18 52 16 5 9

European Union 27 23 49 23 2 3

* On a basis of the question: On this card, please select the letter that would best describe the situation of your household. The letters represent a scale from 1 to 10, where 1 is very poor and 10 is very rich.Answers 1-4 have been classified as 'poor', 5-6 as 'neither poor nor rich', and 7-10 as 'rich'.

Self-assessment of household's situation – felt poverty*

Source: Special Eurobarometer 355 (2010).

11stat.gov.pl

Imagine a 6-step ladder where on the bottom , the first step, stand the poorest people, and the higheststep, the sixth, stand the rich. On which step are youtoday?

See: M.Ravallion,K.Himelein,K.Beegle,Can subjective questions on economic welfare be trusted?Evidence for tree developing countries; https://editorialexpress.com/cgi-bin/conference/download.cgi?db_name=CSAE2014&paper_id=728

Subjective economic welfare question

12stat.gov.pl

Only subjective opinions, without calculating any objective poverty thresholds; examples:

actual income < declared minimal income (MINQ question) „making ends meet” (Deleeck question) with

difficulty or great difficulty

Subjective poverty as„subjective economic stress”

13stat.gov.pl

Opinions on poverty /Perception of poverty

14stat.gov.pl

Subjective definitions of povertyThere are different ways of defining when people are poor in (OUR COUNTRY).

Which of the following statement would best correspond to your definition of being poor?

Country

Their resources are

so limitedthat they cannot

participate fully in the life of the society

they live in

They depend on charity or

public subsidies

They have less than

(NATIONAL POVERTY

THRESHOLD)per month to

live on

They have a very low

social status in our society, independently

from their resource

They cannot afford the

basic goodsthey need to

live (food, shelter,

clothes, etc.) (SPONTANEUS)

It is impossible to

define poverty just

by one statement

(SPONTANEUS)

Other(SPONTANEUS)

Don't know

%

Italy 15 12 12 10 40 8 2 1

Luxembourg 24 27 17 7 19 3 2 1

Poland 19 28 29 9 9 4 0 2

Romania 25 9 21 11 27 5 0 0

United Kingdom 25 27 8 9 18 9 1 3

European Union 27

26 24 18 9 17 4 1 1

Source: Special Eurobarometer 355 (2010).

15stat.gov.pl

Opinions about proportion of poor population vs. EU-SILC at-risk of poverty rate

Country

In your opinion, in (OUR COUNTRY), what proportion of the total population is poor? (Eurobarometer)

At-risk-of relative poverty

rate in 2011(60% median equivalised

income) (EU-SILC)

1 person out of 3 or more (around 30%

or more)

1 person out of 5

(around 20%)

1 person out of 10

(around 10%)

1 person out of 20

(around 5%)Less than 5% Don't know

%

Italy 20 30 20 13 9 8 19,6

Luxembourg 7 19 27 20 17 10 13,6

Poland 38 29 16 7 5 5 17,7

Romania 61 24 8 3 1 3 18,0

United Kingdom 15 27 24 15 8 11 16,2

European Union 27

23 28 22 14 7 6 16,9

Source: Special Eurobarometer 355 (2010), EU-SILC 2011.

16stat.gov.pl

Assessment of the public policies

Country

Would you say public policies and programmes aim at improving the condition of poor people in (OUR COUNTRY) are generally…?

Making thingsbetter

Not having much impact

Making thingsworse

Don't know

%

Italy 10 60 21 9

Luxembourg 37 47 2 14

Poland 19 60 10 11

Romania 11 57 19 13

United Kingdom 21 65 6 8

European Union 27 17 63 12 8

Source: Special Eurobarometer 355 (2010).

17stat.gov.pl

Social perception of poverty in Poland

18stat.gov.plSource: Social Cohesion Survey 2015, 2018 , CSO of Poland

* Poor people – those who among other things, cannot afford to buynecessery food, clothing or cover the housing costs.

In your opinion, what percentage - roughly - do the poor*constitute in our country?

% of persons in households aged 16 or more

19stat.gov.pl

Do you think that material support for people living in poverty is an obligation of the state, a family or both?

% of persons in households aged 16 or more

Source: Social Cohesion Survey 2015, 2018 , CSO of Poland

20stat.gov.pl

Taking your place of residence into consideration - city, town, village -what kind of assistance is most needed for persons you would consider as

living in poverty? (3 possible indications)% of persons in households aged 16 or more

Source: Social Cohesion Survey 2015, 2018 , CSO of Poland

21stat.gov.pl

Objective poverty vs.subjective poverty

22stat.gov.pl

Indicator Source Value (year) Definition

Extreme povertyrate

HBS4.3%(2017)

% of persons in households with the level of equivalisedexpenditures below the subsistence minimum.

At-risk-of-poverty rate after social transfers

EU-SILC15.0%(2017)

% of persons in households with an equivaliseddisposable income (after social transfers) below the threshold of 60% of the national median equivaliseddisposable income.

Income poverty rate SCS13.2%

(2018)

% of households with the level of equivalised income below the threshold of 60% of median equivalisedhouseholds’ income in Poland.

Living conditions poverty rate

SCS4.8%

(2018)

% of households where has been observed 10 of 30 symptoms of poor living conditions linked to such aspects as dwelling conditions, durables, material and non-material deprivation.

Budget balancepoverty rate

SCS7.8%

(2018)

% of households, where at least 4 of 7 symptoms of budgetbalance poverty have been observed. It is aggregatedindicator combining both subjective poverty, and the facts indicating budget difficulties experienced by the household (payment arrears and loans taken to cover the most basic needs).

Multidimensional poverty rate

SCS2.1%

(2018)

% of households where were observed the co-occurrence of three types of poverty, namely: income poverty, living conditions poverty and budget balance poverty.

Selected indicators of poverty and income inequalities in Poland (objective measures)

23stat.gov.pl

Households making ends meet with difficulties and at-risk-of-relative poverty rate in 2014

Country

Households making ends meet* At-risk-of relative poverty rate in 2014

(60% median equivalised income)

with greatdifficulties

with difficulties

with somedifficulties

%

Italy 17,9 22,3 37,3 19,4

Luxembourg 3,9 8,0 15,9 16,4

Poland 10,7 19,0 39,0 17,0

Romania 22,0 26,7 37,0 25,4

United Kingdom 9,1 11,1 26,1 16,8

European Union 28 11,5 16,3 28,7 17,2

*On a basis of the question: A household may have different sources of income and more than one household member may contribute to it. Thinking of your household's total income, is your household able to make ends meet, namely, to pay for its usual necessary expenses? (Possible responses: with great difficulty; with difficulty; with some difficulty; fairly easily; easily; very easily).

Source: Eurostat database, EU-SILC.

24stat.gov.pl

The relationship between income poverty and subjective poverty across the EU states

Source: F. Buttler (2013) available at http://www.horiontal-europeanization.eu/downloads/preprints/PP_HoEu_2013-01_buttler_subjective_poverty.pdf

25stat.gov.pl

‘Social policy makers need both objective and subjectiveindicators. Though subjective indicators have theirlimitations, objective indicators also labor under seriousshortcomings. For some purposes objective indicators arebest suited, for other use subjective indicators arepreferable. The challege of social reporting is to combinethe strengths of these indicators and to make sense of the discrepancies they show’.

Ruut Veenhoven (2002)

Conclusion

26stat.gov.pl

Subjective measures of poverty complement the so-calledobjective measures.

Indicators of the perception shows the social moods which can have the influence on people’s activities in the fields of economy and politics.

Systematic collection of data regarding social perception of so significant aspects of socio-economic reality can be very useful in a context of social dialogue as well as creating, verification and monitoring of social policies aimed at improving the quality of life and social cohesion.

For national use, it seems advisable to conduct widesurveys and analyses on subjective poverty.

In a context of international comparisons it would be recommended to include few indicators based on the minimal set of questions included in households’ surveys.

stat.gov.pl

Anna Bieńkuńska

Statistics Poland, Warsaw

a.bienkunska@stat.gov.pl

Thank you for your attention