New data sources for the valorisation of the absolute poverty thresholds

Abstract

Inter Institution Scientific Commission on Absolute Poverty (IISCAP) was established at the National Institute of Statistics (Istat) with the aim of reviewing and improving the methodology used to estimate the incidence of poverty. Several issues were addressed by the Commission, among which the advancements in the valorisation of the absolute poverty lines that were made possible by the availability of new data sources for the scope of official statistics, and specifically by the development of data collection of the survey on consumer prices. These advancements are at the core of the present paper. On the one hand, the assessment of the minimum average prices of food items included in the poverty basket has been greatly improved through the use of transaction data on grocery products coming from the outlets of the modern distribution, already in use for the purpose of the inflation estimate. Moreover, the information provided by the administrative data on rental contracts, which also contributes to the compilation of the consumer price index, allowed the abandonment of the former model approach, based on Household Budget Survey. As a result, the housing component of the poverty line now includes exogenous estimates of the monetary value of rents, based on the Tax Office database, that gives almost a complete picture of all the lease contracts existing in a given year in Italy.