Poverty in Europe¹

In this paper a definition of poverty in terms of welfare is given. A method is developed to derive poverty lines from an individual welfare function of income. The model is extended to analyse the effect of several socio‐economic characteristics on the level of the poverty line. An empirical application of the method is given based on data from a survey in eight European countries in 1979. Differences in the poverty lines both between countries and between socio‐economic groups within each country are considered. Finally the number of people below these poverty lines is estimated for all countries in the group.