Title: Regional Human Poverty Index - poverty in the regions of the European Union
Publisher: Publications Office of the European Union
Publication Year: 2014
JRC N°: JRC90975
ISBN: 978-92-79-39643-4 (print)
978-92-79-39642-7 (pdf)
ISSN: 1018-5593 (print)
1831-9424 (online)
Other Identifiers: EUR 26792
OP LB-NA-26792-EN-C (print)
OP LB-NA-26792-EN-N (online)
URI: http://publications.jrc.ec.europa.eu/repository/handle/JRC90975
DOI: 10.2788/10089
Type: EUR - Scientific and Technical Research Reports
Abstract: We measure area-specific poverty in the European Union (EU) at the second level of the nomenclature of territorial units for statistics (NUTS 2). We construct the regional human poverty index (RHPI), which comprises four dimensions: social exclusion, knowledge, a decent standard of living, and a long and healthy life. The RHPI provides information regarding the relative standing of a given country with respect to the level of poverty but also shows the variability of poverty within a country with respect to NUTS 2. The approach we propose has four properties. (1) Because the RHPI comprises only six indicators it is relatively simple to be replicated in subsequent years. (2) The RHPI provides information about the absolute magnitude of poverty experienced by Europeans in a given country and provides information about the relative standing of the country. (3) The RHPI shows the variability of poverty within a country with respect to NUTS 2. (4) The RHPI shows satisfactory statistical coherence confirmed by the results of correlation analysis and principal component analysis. As confirmed by uncertainty analysis, the RHPI also shows satisfactory robustness to the normative assumptions made during the construction process. The RHPI also has some limitations. First, the conceptual model of the RHPI relies mostly on the conceptualisation of the poverty index proposed by the United Nations (UN) and data availability. Second, although research on poverty has developed rapidly in recent years, it has failed to establish the relative importance of poverty dimensions and thus guide us in establishing aggregation weights. This failure has resulted in a necessity to formulate certain a priori assumptions. Third, all indicators we proposed are of objective nature, which may influence the results and final conclusions. However, this is intentional and reflects the best approach that is achievable (due to lack of disaggregated at the NUTS 2 level subjective indicators) in order to measure poverty in the NUTS 2 regions. Fourth, in our computations percentage of population below the income poverty line in NUTS 2 regions are calculated using national poverty lines and without taking into account social transfers in kind. Regarding the social transfer in kind, without this type of adjustment household income is generally underestimated in countries with extensive public services, like in the Nordic member states, and overestimated in those where households have to pay for most of these services (Annoni et al., 2012; EC, 2010). However, disaggregated at the NUTS 2 level data with this respect are not available, therefore our approach is the best achievable. Then, the national, instead of the regional, poverty lines are applied to highlight the differences between regions within the same country, as suggested by Betti at al. (2012). The RHPI is computed for all NUTS 2 regions in 28 EU countries. Our results show that the scale of poverty differs considerably within the EU countries, with RHPI scores ranging between 9.23 for Prague and more than 65 for Bulgarian Yugoiztochen and Severozapaden. We also find that substantial differences in levels of poverty between regions are present in all of the EU countries. The only exceptions to this finding are small EU countries where neither NUTS 1 nor NUTS 2 regions exist. Our results also show that, in general, in NUTS 2 regions comprising a capital, the poverty level is lower than the country average. The only exceptions are Vienna, Brussels, and Berlin, where poverty measured by the RHPI is higher than the country average. By contrast, Bucharest, Sofia, Bratislava, Prague, Budapest, and Madrid exhibit decisively lower levels of poverty than their country averages
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