Measuring poverty in the Netherlands: the generalised reference budget approach

Abstract

This chapter looks into generalised two reference budgets for measuring poverty in the Netherlands. The first, a “basic needs” budget, is based on the expenses that can be regarded as the minimum necessary standard in the Netherlands. The second is a Modest but Adequate (MBA) reference budget, which is more generous and takes into account the minimum cost of recreation and social participation. The chapter clarifies how the both the budgets are first determined for a single household and then derived for other household types by applying equivalence scales. It also explains that the reference budgets are based on the deliberations of experts, informed by administrative data, and national expenditure surveys.