Comparing small area techniques for estimating poverty measures

The Europe 2020 Strategy has formulated key policy objectives or so-called “headline targets” which the EU as a whole and Member States are individually committed to achieving by 2020. One of the five headline targets is directly related to key quality aspects of life, namely social inclusion; within these targets, the EU-SILC headline indicators at-risk-of-poverty or social exclusion and its components will be included in the budgeting of structural funds, one of the main instruments through which policy targets are attained. For this purpose, DG Regional Policy of the European Commission is aiming to use sub-national/regional level data (NUTS 2). Starting from this, the focus of the present paper is on the “regional dimension” of well-being. In fact, we compare two small area techniques, namely the cumulation and the spatial EBLUP (SEBLUP), on the basis of EU-SILC data from Austria and Spain.