Rethinking equivalence scales in the measurement of extreme poverty: evidence from Poland
Rethinking equivalence scales in the measurement of extreme poverty: evidence from Poland

Summary/Abstract: This paper examines the measurement of extreme poverty in Poland, focusing on the role of equivalence scales. The key research question is whether the original OECD equivalence scale, currently used by Statistics Poland, is consistent with the scale effects implied by the construction of the subsistence minimum across different household types. Using a oneparameter power equivalence scale, extreme poverty rates are recalculated under alternative assumptions based on anonymized microdata from the 2023 Household Budget Survey. The results indicate that the original OECD scale shows stronger economies than the one embedded in the subsistence minimum values, leading to substantial differences in the estimated extreme poverty rate. These findings underline the importance of a careful selection of equivalence scales in official poverty statistics, as methodological choices directly influence poverty assessment and the targeting of social policy.

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