Methodological paper on intra-country comparisons of poverty rates

This report constitutes Deliverable 9.9, for Work Package 9 of the InGRID-2 project.

In this deliverable we address the issue of intra-country comparisons of poverty indicators using a statistical methodological approach. Our focus is the estimation of a relative poverty indicator, the At Risk of Poverty Rate or Head Count Ratio, when considering the use of subnational poverty lines. We first study the impact of the use of regional (NUTS 2 level) poverty lines on the patterns of poverty. Then, we present a methodology that can be used to estimate subnational poverty lines that adjust for the different cost of living that usually characterise the subnational areas within a country. The same methodology could be used also to compute poor specific Purchasing Power Parities (PPPs) in the effort of studying the spatial distribution of poverty. The approach is presented at regional and provincial level (NUTS 3) in Italy. When focusing on the provincial level, we resort to Small Area Estimation (SAE) models as at this level the sample sizes of the EU-SILC and HBS surveys are not enough to compute reliable estimates. Further, in this work we deal with cross-border data for SAE in border regions, exploring the use of remote sensing data products as covariates for small area models.