Methodological Choices and Data Quality Issues for Official Poverty Measures: Evidences from Italy

The plurality of the official poverty estimates in Italy covers both absolute and relative approaches, ranges from consumption to income-based measures, follows different methodologies and uses several data sources. We can therefore expect that each measure gives a somewhat different picture of poverty, in its level as well as in its change across subgroups of the population. This paper investigates the effect of methodological choices together with the effect of different data quality aspects on the official poverty estimates. Usually, methodological issues attract much attention both in literature and empirical studies. However, the results of the sensitivity analysis suggest that more specific attention should be paid to data quality issues and to the definition of the variables. Our main conclusion is that an improvement in the quality as well as the inclusion of some items in the definition of the variable may result in large changes in poverty indicators. This finding signals that the data quality aspects have a higher impact on poverty estimates than some methodological issues.