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66 4. Empirical results Volume LXV n. 1 – Gennaio-Marzo 2011 Starting from the correlation between health and income poverty, we can notice in table 1 that Denmark and Sweden record the highest values of correlation, while Spain the lowest in both years. Moreover, the area under the ROC curves rages in the first year of the survey from 0.505 to 0.639, while in the second wave from 0.506 to 0.650, meaning that health conditions are not a perfect signal of income poverty and justifing therefore the multidimensional approach to describe poverty in Europe. In table 1 we also summarize the head count ratios of income and health poverty: Switzerland seems to be the country where there is the largest portion of poors in income in both years, while Sweden records in the two waves low income poverty rates. Focusing on health instead those countries with the highest poverty in health are Netherland, Greece and Switzerland. Table 1 – ROC areas and head count ratios for income and health, wave 1 and 2. Obs1 Obs2 ROC1 ROC2 Income1 Income2 Health1 Health2 AT 1853 1341 0.530 0.550 0.171 0.138 0.037 0.018 DE 2929 2568 0.602 0.555 0.159 0.178 0.030 0.024 SE 2930 2745 0.637 0.621 0.100 0.155 0.054 0.019 NL 2857 2661 0.543 0.586 0.164 0.159 0.077 0.098 ES 2329 2228 0.505 0.506 0.154 0.180 0.024 0.021 IT 2500 2983 0.577 0.544 0.187 0.161 0.038 0.044 FR 2931 2967 0.609 0.604 0.160 0.178 0.028 0.053 DK 1655 2616 0.639 0.650 0.176 0.170 0.033 0.094 GR 2840 3243 0.569 0.509 0.145 0.206 0.091 0.107 CH 944 1462 0.597 0.517 0.239 0.208 0.087 0.083 BE 3689 3169 0.523 0.526 0.140 0.140 0.066 0.054 If we summarize poverty in the two dimensions using the union approach, we find that Netherland and Switzerland are the two countries with the highest value of multidimensional poverty in 2004, the same index remains high even if slightly lower for Switzerland in 2006 and drecreases for Austria, Italy and Belgium. The ranking changes if we consider the intersection approach: while in 2004 Switzerland has the highest value, in 2006 is Denmark that records the largest proportion of poors, Spain and Austria instead have the lowest value in both waves. Looking at the Bourguignon and Chakravarty indexes, we can notice that if we give equal weights to income and health, Switzerland and Italy are the countries with the highest poverty in 2004, while if the relative importance of health
Rivista Italiana di Economia Demografia e Statistica increases also Netherland and Greece have high poverty rates. In 2006 Switzerland, Greece and Spain record a high value for the multidimensional poverty index with equal weights for income and health, while if we triple the relative weight of health, also Netherland is among those countries with the highest poverty rates. Table 2 – Bi-dimensional headcount ratios (union and intersection) and Bourguignon and Chakravarty indexes of multidimensional poverty, wave 1 and 2. Union Intersection BC (α=1, θ=1, b=1) BC (α=1, θ=1, b=3) w1 w2 w1 w2 w1 w2 w1 w2 AT 0.201 0.152 0.007 0.004 0.074 0.042 0.082 0.043 DE 0.177 0.192 0.013 0.010 0.056 0.077 0.060 0.080 SE 0.127 0.165 0.027 0.009 0.031 0.043 0.039 0.045 NL 0.224 0.221 0.016 0.035 0.076 0.081 0.121 0.122 ES 0.172 0.197 0.006 0.004 0.068 0.096 0.075 0.101 IT 0.209 0.192 0.016 0.012 0.085 0.091 0.092 0.105 FR 0.176 0.202 0.012 0.028 0.054 0.076 0.058 0.084 DK 0.197 0.221 0.012 0.043 0.050 0.061 0.068 0.085 GR 0.209 0.283 0.028 0.030 0.075 0.145 0.099 0.172 CH 0.279 0.264 0.048 0.027 0.113 0.102 0.148 0.136 BE 0.191 0.180 0.016 0.014 0.069 0.067 0.095 0.090 Our empirical results show that, in Europe among elderly people, the degree of correlation between the two poverty dimensions considered, income and health, is low, meaning that there is an advantage moving from the uni-dimensional to multidimensional poverty in order to give a more complete view of the phenomenon. References BOURGUIGNON F. and S. CHAKRAVARTY, 2003. The Measurement of Multidimensional Poverty. Journal of Economic Inequality, vol. 1(1): 25-49. BUSSINI O. and D. LANARI, 2010. Condizione socio-economica e disuguaglianze di salute nella popolazione anziana in Europa. Rivista SIEDS, vol. LXIV(1-2): 55-62. D’AMBROSIO C., DEUTSCH J. and J. SILBER, 2009. Multidimensional Approaches to Poverty Measurement: An Empirical Analysis of Poverty in Belgium, France, Germany, Italy and Spain, based on the European Panel. Applied Economics, 1466-4283. FOSTER J., GREER J. and E. THORBECKE, 1984. A Class of Decomposable Poverty Measures. Econometrica, vol. 52 (3): 761-766. MADDEN D., 2008. Health and Income Poverty in Ireland, 2003-2006. University College Dublin, School Of Economics, Working Paper 200815. SEN A.K., 1999. Development as freedom. Oxford: Oxford University Press. 67
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