A poverty threshold based on a generalised budget approach
The poverty thresholds currently used in empirical research are problematic
in several respects. Their theoretical status is sometimes unclear, because
they refer to a specific policy interpretation or to a different concept, such
as inequality. In other cases there may be technical reasons why they are
difficult to apply in practical research situations. In the light of these
issues, SCP recently examined the merits of a proposed new poverty threshold.
This is based on norms for expenditure which are virtually unavoidable in a
modern society. In the lowest variant the threshold amount is spartan, but
adequate to enable a household to be run independently. The highest variant
also includes scope for some social participation.
The new criterion can be applied simply and consistently in practical research. This publication illustrates this by presenting a historical analysis of poverty rates in the Netherlands (1985-2005) based on the new threshold amounts, two traditional Dutch poverty thresholds and the relative income threshold as used by the European Union. An analysis of the views prevailing among the Dutch population shows that the new threshold matches dominant notions of poverty fairly well.