Refining the Monetary Poverty Indicators Under a Join Income-Consumption Statistical Approach: An Application to Spain Based on Empirical Data

Abstract

In the European Union poverty has been measured indirectly in a one-dimensional way from a perspective based on disposable income. This classical approach has certain limitations when representing such a complex phenomenon by means of a single variable, reaching sometimes a modest association with regard to other direct poverty measurements such as severe material deprivation rate. In this article we study the measurement of monetary poverty from a two-dimensional point of view favouring a perspective of complementarity rather than one of substitutability. The joint analysis of the monetary income and consumption distribution makes it possible to identify different association patterns between these two variables for individuals located on one side or the other of the respective poverty thresholds. Expenditure on housing that is a determining factor in lower-income households and imputed rents that would be paid by the owner household of a dwelling, allow us to calculate an at-risk-of poverty rate which refines the link with material poverty in both temporal and spatial dimensions.