Events and Meetings of Italian Statistical Society, Statistics and Demography: the Legacy of Corrado Gini

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Is there a dynamic relationship between income poverty and perceived financial difficulties?
Alessio Fusco

Last modified: 2015-09-04

Abstract


An individual's economic welfare can be assessed both objectively, through the standard income poverty approach, or subjectively on the basis of the individual's perceived financial difficulties. The aim of this paper is to determine whether there are dynamic cross-effects between both processes and to contribute to the literature on the effect of subjective variables on objective outcomes. Using Luxembourg survey data, this paper highlights the existence of a feedback effect from past perceived financial difficulties on current income poverty suggesting that subjective perceptions can have objective effects on an individual's outcomes.


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