Glossary:Subjective poverty
Subjective poverty
Subjective poverty is a newly developed area with the idea of supplementing the well known and traditional poverty indicators such as at-risk-of-poverty, severe material and social deprivation, people living in quasi-jobless households etc. Subjective poverty is a concept developed based on the EU-SILC annual variable “Ability to make ends meet”. Contrary to the relative poverty measure, the at-risk-of poverty rate indicator (calculated based on the ranking of the households’ income at country level), the aim of subjective poverty is to assess the respondents’ perception of the difficulties experienced by the household in making ends meet.
The assessment takes into account the households’ material wellbeing situation including income, expenditure, debt and wealth. The EU-SILC variable “Ability to make ends meet” has 6 response categories:
- With great difficulty;
- With difficulty;
- With some difficulty;
- Fairly easy;
- Easily;
- Very easily.
Subjective poverty is defined on the basis of a combination of the top two categories of the variable. A household that answered “With great difficulty” or “With difficulty” is considered to fall under subjective poverty. This approach is more conservative than the approach based on the minimum income question (or lowest income to make ends meet). The minimum income question approach of subjective poverty was developed mid- 20th century, and it is a model based approach.