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On Italian Households’ Economic Inadequacy Using Quali-Quantitative Measures

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  • Luca Zanin

    (Prometeia)

Abstract

Motivated by an interest in investigating factors associated with poverty risks in Italy, our study provides insight into the relationship between various socio-economic, demographic, and behavioural variables and a new measure of the economic inadequacy of households. We propose that a household is in a condition of economic inadequacy when it simultaneously has difficulty making ends meet and is in arrears with payments of commitments for more than 90 days. To analyse the determinants of economic inadequacy, we use cross-sectional microdata collected through a structured questionnaire from a 2012 survey of household income and wealth conducted by the Bank of Italy. The results of the analysis show that the probability of economic inadequacy for Italian households is higher when the household is located in regions in southern Italy, has a low equivalent income, registers a decrease in income compared with that of a normal year, has a low liquidity ratio, pays rent for the house of residence, is over-indebted, is indebted to friends and relatives, and has an unhappy and impatient household head. We also propose constructing a composite indicator at the regional level that combines the percentage of households in relative poverty, as measured by the Italian National Institute of Statistics, and the percentage of households that we identify as existing in a condition of economic inadequacy. The composite indicator allows us to take into account some aspects of household living conditions that are not included in the measure of relative poverty.

Suggested Citation

  • Luca Zanin, 2016. "On Italian Households’ Economic Inadequacy Using Quali-Quantitative Measures," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(1), pages 59-88, August.
    • Handle: RePEc:spr:soinre:v:128:y:2016:i:1:d:10.1007_s11205-015-1019-1
    DOI: 10.1007/s11205-015-1019-1
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    1. Chenhong Peng & Paul Yip, 2023. "Access to Neighbourhood Services and Subjective Poverty in Hong Kong," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 18(2), pages 1015-1035, April.
    2. Liaqat Ali & Muhammad Kamran Naqi Khan & Habib Ahmad, 2020. "Education of the Head and Financial Vulnerability of Households: Evidence from a Household’s Survey Data in Pakistan," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 147(2), pages 439-463, January.
    3. Chenhong Peng & Paul S. F. Yip & Yik Wa Law, 2020. "What Factors Beyond Economic Poverty Lead People in High-income Societies to Feel Poor? Evidence from Hong Kong," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(3), pages 991-1027, December.
    4. Zanin, Luca, 2018. "Private monetary transfers between households: Who is helped and by whom?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 17(C), pages 76-82.
    5. Netta Achdut & Tehila Refaeli & Talia Meital Schwartz Tayri, 2021. "Subjective Poverty, Material Deprivation Indices and Psychological Distress Among Young Adults: The Mediating Role of Social Capital and Usage of Online Social Networks," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(3), pages 863-887, December.
    6. Chang, Qingsong & Peng, Chenhong & Guo, Yingqi & Cai, Ziyi & Yip, Paul S.F., 2020. "Mechanisms connecting objective and subjective poverty to mental health: Serial mediation roles of negative life events and social support," Social Science & Medicine, Elsevier, vol. 265(C).
    7. Chiara Mussida & Luca Zanin, 2020. "Determinants of the Choice of Job Search Channels by the Unemployed Using a Multivariate Probit Model," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(1), pages 369-420, November.
    8. Chenhong Peng, 2023. "Household Consumption and the Discrepancy Between Economic and Subjective Poverty: The Mediating Roles of Perceived Social Status and Social Connectedness," Journal of Happiness Studies, Springer, vol. 24(5), pages 1703-1727, June.
    9. Chenhong Peng & Yik-Wa Law, 2023. "How Do Consumption Patterns Influence the Discrepancy Between Economic and Subjective Poverty?," Journal of Happiness Studies, Springer, vol. 24(4), pages 1579-1604, April.

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    More about this item

    Keywords

    Bivariate probit model; Household’s economic inadequacy; Endogeneity; Predicted joint probability; Survey of household income and wealth; Spatial economic inadequacy;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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