In search of the poor

Economists tend to adopt an empiricist approach to poverty, commonly calculating it as the proportion of the population that fall below some speci®ed income threshold. This approach has been developed to take into account heterogeneous household needs by using income equivalence scales, but most other individual characteristics are totally ignored. This paper questions the relevance of this approach by considering the individualÕs perception of poverty and how it relates to their income and other characteristics. Logit modelling techniques are used to investigate the determinants of poverty perception and to ascertain whether income is an important determinant, or whether other socio-economic factors dominate. The ®ndings suggest that limiting the analysis to an income threshold will restrict our understanding of the nature of poverty and the problem it presents to our society. Ó 2000 Elsevier Science B.V. All rights reserved. PsycINFO classi®cation: 3040 JEL classi®cation: D60; I31