Small area poverty indicators adjusted using local spatial price indices

In this work we focus on estimating monetary poverty indicators at provincial level in Italy taking into account the different price levels within the country. Indeed, the historical Italian North-South divide also correspond to a strong differential in price levels, which can affect the poverty threshold. The local price levels are accounted using two sub-regional spatial price indices: 1. the indices based on retail volumes (units) and prices for food and grocery, and 2. the indices based on housing costs collected through the Household Budget Survey. Sub-regional poverty estimates are then computed using area level small area models, which link direct unreliable estimates to aggregated auxiliary information.