Measuring and detecting situations of need and deprivation using Graded Response models

We exploit information on living conditions of households to build an estimation of their degree of need and deprivation. The information we use is often subjective and we assume that deprivation is a latent variable that we estimate with item response theory models on Italian data. Then, we relate this estimated trait to more objective and observable variables that thus could be used within policy actions and welfare programmes to pinpoint situations where the estimated deprivation is high.