Relational Well-being and the Many Dimensions of Poverty in Italy

This study measures the many dimensions of poverty accounting for both the material and non-material dimensions of well-being. We are interested in learning whether an individual who is poor in the monetary dimension is also poor under a relational point of view, an especially relevant aspect in pandemic times. The monetary dimension alone, while often significantly correlated to other non-monetary aspects of well-being, is not sufficient to fully describe the non-material dimensions of need. Not all goods and services that are important to people are obtained from the market, such as relational goods. The use of a unique dataset that integrates the different dimensions contributing to quality of life permits estimating poverty for different types of income by adding wealth (current income), the value of domestic production (extended income) and the value of leisure (full income) to disposable income. These measures have been corrected to account for differences in household composition and in the cost of living and quality of services across regions. The study shows that the ability to produce domestic and relational goods, after taking the monetary dimensions in due account, are very important factors that redraw the map of poverty in Italy, especially in view of the North-South divide. These new traits require a radical rethinking of traditional policies to fight poverty.