CEA HPI-Index: Human Poverty Index

The poverty levels in the municipalities and the horizontal and vertical decentralization in a country are interrelated. Given that poverty reduction is one way of improving the standard of living in a region – the goal of the decentralization as a process – on one side, the fiscal decentralization of one country can be used to decrease the poverty in the country if it is drafted and implemented in the most efficient way. On the other side, the degree of poverty, as expressed through poverty indicators can be used to design an optimal inter-government transfer system. For the above reasons, the fiscal decentralization could be seen through the lens of poverty reduction. We at CEA will use as reference the HPI-2 poverty index methodology .

Variables used for the indices:

Due to lack of data CEA will develop HPI index from the following variables:

1. A proxy for long and a healthy life will be the infant mortality rate.
2. Knowledge will be measured with the illiteracy rate.
3. Social exclusion will be measured as the unemployment rate per LSG

Statistics available for each of the variables

Min
Max
Average
Coefficient of variation

Available at:

NUTS 3 (8 regions)
NUTS 4 (34 LSG)
NUTS 5 (123 LSG)