Nº 40 (August, 2006). Leonardo Lucchetti. 

This paper, like the previous analysis by Arias and Sosa Escudero (2004), studies the determinants of the subjective perception of individual welfare and compares these to the observable characteristics which influence traditional income or consumption poverty. For this purpose, we create a poverty profiles based on subjective and objective notions considering socio-economic, educational, labor and geographic characteristics and then estimate probit models which use these attributes as controls. The paper differs from previous work in two respects. First, since there may be differenced response to characteristics on objective and subjective measures, we identify observable characteristics where both measures do not coincide. Bivariate probit models are estimated for this purpose, which allow calculating the probability of an individual has of classifying themselves as poor (non-poor) considering their subjective perception of individual welfare and be classified as poor (non-poor) in terms of income or consumption. Second, the study calculates a monetary value which may be interpreted as the subjective poverty line.

JEL Code: D60, I32