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Quality of government and subjective poverty in Europe

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  • Massimo Baldini
  • Vito Peragine
  • Luca Silvestri

Abstract

We study the effect of quality of government on subjective poverty across European countries and regions, taking advantage of recently released data on the quality of public institutions at the regional level, and of information on household subjective poverty. In the analysis we try to separate the effects of quantity and quality of public services on perceived well-being, controlling for the size of the local government and for the receipt of in-kind services by each household of the sample. Results suggest that good governance significantly reduces the probability of being subjectively poor, both over the whole population and also among households that are poor in terms of monetary income. We then estimate the greater cost that a family has to bear in order to achieve a given level of welfare, if it lives in a region with inefficient public institutions. Our measure of this inefficiency cost is around 6% of disposable income.

Suggested Citation

  • Massimo Baldini & Vito Peragine & Luca Silvestri, 2017. "Quality of government and subjective poverty in Europe," Department of Economics 0107, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    • Handle: RePEc:mod:depeco:0107
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    More about this item

    Keywords

    Quality of government; subjective poverty; minimum income; European regions; poverty line;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • H1 - Public Economics - - Structure and Scope of Government
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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