“…However, income has an interesting effect on housing quality. As Fusco () notes, income and housing deprivation are negatively associated, and, in the long run, this relationship becomes stronger. Therefore, it is reasonable to consider income in the analysis of multidimensional housing quality.…”
Summary
Factor analysis models are used in data dimensionality reduction problems where the variability among observed variables can be described through a smaller number of unobserved latent variables. This approach is often used to estimate the multidimensionality of well‐being. We employ factor analysis models and use multivariate empirical best linear unbiased predictor (EBLUP) under a unit‐level small area estimation approach to predict a vector of means of factor scores representing well‐being for small areas. We compare this approach with the standard approach whereby we use small area estimation (univariate and multivariate) to estimate a dashboard of EBLUPs of the means of the original variables and then averaged. Our simulation study shows that the use of factor scores provides estimates with lower variability than weighted and simple averages of standardised multivariate EBLUPs and univariate EBLUPs. Moreover, we find that when the correlation in the observed data is taken into account before small area estimates are computed, multivariate modelling does not provide large improvements in the precision of the estimates over the univariate modelling. We close with an application using the European Union Statistics on Income and Living Conditions data.
“…However, income has an interesting effect on housing quality. As Fusco () notes, income and housing deprivation are negatively associated, and, in the long run, this relationship becomes stronger. Therefore, it is reasonable to consider income in the analysis of multidimensional housing quality.…”
Summary
Factor analysis models are used in data dimensionality reduction problems where the variability among observed variables can be described through a smaller number of unobserved latent variables. This approach is often used to estimate the multidimensionality of well‐being. We employ factor analysis models and use multivariate empirical best linear unbiased predictor (EBLUP) under a unit‐level small area estimation approach to predict a vector of means of factor scores representing well‐being for small areas. We compare this approach with the standard approach whereby we use small area estimation (univariate and multivariate) to estimate a dashboard of EBLUPs of the means of the original variables and then averaged. Our simulation study shows that the use of factor scores provides estimates with lower variability than weighted and simple averages of standardised multivariate EBLUPs and univariate EBLUPs. Moreover, we find that when the correlation in the observed data is taken into account before small area estimates are computed, multivariate modelling does not provide large improvements in the precision of the estimates over the univariate modelling. We close with an application using the European Union Statistics on Income and Living Conditions data.
“…Moreover, a composite index of deprivation requires judgment on the relative importance of each domain or indicator. While most studies are pragmatic and give equal weights to the domains/indicators (Land et al, 2001, Barnes et al, 2008, Moore et al, 2007, Wüst and Volkert, 2012, some others place more importance on indicators in which deprivation is not widespread (Whelan et al, 2004, Bastos and Machado, 2009, Figari 2011, Fusco 2012and Decancq and Lugo 2013. One of the advantages of the data-driven weights is that they are constructed based on the distribution of achievements in society, without taking into consideration any value judgment about how the trade-offs between the items should be.…”
As recession and financial crisis spread across Europe an increasing number of people are at risk of poverty and social exclusion. Children are more exposed to the risk of poverty and social exclusion than the overall population of the EU. The current climate of economic downturn calls out for an urgent need to break the vicious circle of intergenerational transmission of poverty and social exclusion in order to improve the well-being of children in a systematic and integrated way. Using the EU-SILC 2009 module on deprivation, this paper aims to contribute to the literature on poverty and social exclusion by analysing the determinants of material deprivation among children. Special attention is given to the type of household children belong to, a characteristic that is strongly determined by adults' behaviour. We find that the level of child deprivation varies among household types. Moreover, we confirm that even after controlling for the socio-economic characteristics of the household and parents, there still exist households with a lack of certain items that are strongly correlated to children with intense deprivation. Therefore, we can conclude that there exists an association between child deprivation and the household-deprivation profile that surpasses the socio-demographic characteristics of the household and parents.JEL CODES: I32, J13
“…In general, there is a weak association between personal income and the probability of experiencing different forms of material deprivation (Layte et al, 2001a(Layte et al, , 2001bWhelan et al, 2001;Figari, 2012;Fusco, 2012). Despite this weak association, Boarini and Mira d'Ercole (2006) found that the probability of experiencing material deprivation is twice as large among those in the lower quartile of the income distribution than for those in the middle quartile, although these differences vary greatly across countries.…”
This paper assesses to what extent differences in the characteristics of individuals (micro‐level perspective) and country‐specific factors (macro‐level perspective) can explain country differences with respect to material deprivation levels. Thus, our work aims to simultaneously consider the macro dimension and the predominantly individually‐oriented study field of material deprivation using multilevel techniques. We make use of the European Union Statistics on Income and Living Conditions. Our results show that country‐specific factors seem to be much more relevant than individual effects in explaining country differences in material deprivation. We estimate that the introduction of country‐specific factors reduces the proportion of total variance due to between‐country differences in deprivation by 72.7 percent, while individual‐level variables reduce this proportion by only 9.4 percent. We also show, through interaction variables, that the effect of sociodemographic characteristics can be shaped by institutional and structural factors, especially by the level of GDP.
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