An Empirical Approach to the Poverty Indicators Based on Revealed Parameters: The Case of Spain

This article investigates the issue of measuring the proportion of the population affected by the phenomenon of poverty in Spain on the basis of the relationship between the severe material deprivation rate and the at-risk-of-poverty rate by regions. The current definitions of equivalence units and equivalent income were analysed and an innovation to allow the introduction of a parametric model, based on the revealed annual consumption of the main different type of households and on the regional purchase power parities, was subsequently proposed. In the case of Spain it was discovered empirically that the equivalence units are not constant, as maintained until now, but that they vary over time. An improvement between the relations of the two rates was obtained by means of the application of these revealed scales. The regional composition was also improved. The results could serve as a base for future studies to provide more detailed information about the breakdown of the relative poverty within each country and, thereby, to meet the relevant information requests, at national and international level, to support the implementation of public policies in this area.