Statistical matching of EU-SILC and the household budget survey to compare poverty estimates using income, expenditures and material deprivation

The Europe 2020 Strategy's social inclusion target will be measured through work intensity, income and material deprivation indicators using the EU Statistics on Income and Living Conditions (EU-SILC). However, there has been increasing interest in recent years in whether expenditure and consumption also provide appropriate measures of standards of living. This Working Paper therefore aims to compare people's exposure to poverty using three different measures: income, expenditure and material deprivation. However, no single data source provides joint information on all these variables. Therefore, this Working Paper describes methodological work conducted to statistically match expenditure from the Household Budget Survey (HBS) with income and material deprivation contained within EU-SILC. The three matching approaches used are parametric, non-parametric and mixed. Overall, the mixed methods approach tends to perform slightly better. The implications of this work for the on-going review of the EU-SILC legal basis are discussed.