Measuring deprivation in Spain

This paper analyses the deprivation in Spain based on ECHP data for 1996. Usually, an indirect approach for measuring deprivation or poverty is used with poverty lines. That is, income is used as a proxy for analysing living conditions. However, some studies have used a direct approach to measure deprivation or poverty (Townsend 1988, Mayer and Jencks 1988, Muffels 1993, Callan et al 1993, Dirven and Fouarge 1995, Layte et al 1999, Whelan et al 2000). The aim of this paper is improving the identification of the poor people.
The central point of the concept of deprivation we use is related to the opportunity to have or do something. Therefore, deprivation means here an inability to get the goods, facilities and opportunities, which are usual in the household environment.
Since all of the variables needed to build the profiles are categorical, we use the latent class model to solve this problem because it is the best model to do it. This model supplies some clusters that are homogeneous within them and heterogeneous between them.
We have analysed a sample of 6268 households. We have chosen households as the unit of analysis because the variables used in this study appears only in the ECHP Public Use household file. These variables are related to financial situation, housing and durable goods. Firstly, we have found deprivation clusters for each part (financial situation, durable goods, housing facilities, accommodation) and, afterwards, we have built a composite typology in order to identify deprived households.