Relative deprivation, reference groups and the assessment of standard of living, Vol. 1 of 1

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

Author:	Silber, Jacques; Verme, Paolo;	Collection Title:	Policy Research working paper ; no. WPS 5930
Country:	Europe;	Date Stored:	2012/01/03
Document Date:	2012/01/01	Document Type:	Policy Research Working Paper
Language:	English	Region:	Europe and Central Asia
Report Number:	WPS5930	SubTopics:	Economic Theory & Research; Emerging Markets; Inequality; Labor Policies; Poverty Impact Evaluation
Volume No:	1 of 1

Summary: 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.


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