Relative deprivation, reference groups and the assessment of standard of living

Jacques Silber, Paolo Verme

Research output: Contribution to journalArticlepeer-review

11 Scopus citations

Abstract

This paper proposes two new indices of relative deprivation, derived from an extension of the concept of generalized Gini to the measurement of distributional change. Population- and income-weighted relative deprivation indices are then defined and, using panel data from the Consortium of Household Panels for European Socio-Economic Research (CHER), we check which of the various ways of defining individual deprivation best fits the answers given by individuals on the degree of their satisfaction with income. We find that the deprivation indices proposed are consistently and negatively correlated with income satisfaction as reported by respondents, that income weighted measures fit better than population weighted measures and that this fit improves with countries that experienced deep institutional changes such as the transitional economies of Eastern Europe.

Original languageEnglish
Pages (from-to)31-45
Number of pages15
JournalEconomic Systems
Volume36
Issue number1
DOIs
StatePublished - Mar 2012

Keywords

  • Generalized Gini index
  • Income satisfaction
  • Relative deprivation

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