Analysis of Poverty in Slovakia Based on the Concept of Relative Deprivation

It is always difficult to define the one and only measure of poverty, as there are different concepts of poverty based on a number of welfare indicators. The paper discuses main approaches to individual welfare measurement. A measure of individual welfare in the concept of relative deprivation is proposed. Three dimensions of relative deprivation are considered (economic strain, inability to afford certain items, and housing). The measure is based on multiplicative approach and thus is more sensitive to changes and differences in data than measures based on additive approach. The measure reflects the complex nature of households´ relative deprivation and is applied to Slovak EU SILC 2005 - 2008 microdata in order to analyze the level of poverty in Slovakia in the concept of relative deprivation. Three different poverty lines are applied to the data and results are compared. Level of poverty in terms of relative deprivation is decreasing in Slovakia over time. Using the proposed approach, the results strongly depend on the number of components included in each dimension, as well as the components itself. In accordance with economic changes in the society, in the further research reappraisal of certain components could be a matter of discussion in order to reflect the present situation.