GINI DP 36: Material deprivation, economic stress and reference groups in Europe: An analysis of EU-SILC 2009

In this paper we take advantage of the recent availability of data from the special module on material deprivation in the 2009 European Union Statistics on Income and Living Conditions (EU-SILC) to develop a more comprehensive understanding of the relationship between material deprivation and economic stress. In particular, we focus on the moderating role played by cross-national differences in levels of income and income inequality such that the consequences of material deprivation for subjective economic stress are conditional on the value of macro-economic attributes. In an analysis focused on households clustered within countries, these questions can be most appropriately addressed by a multilevel analysis that allows us to explore the manner in which material deprivation measured at the household level interacts with national attributes in infl uencing household levels of economic stress. Evidence for such moderation is provided by a signifi cant statistical interaction between deprivation and country attributes. In this paper we undertake such an analysis and consider the implications of our findings for competing perspectives on the nature of reference groups in Europe.