COMUNIKOS (Communicating Uncertnty in Key Official Statistics) : application to measuring well-being at local level for informed public policy

In late 2018 Eurostat launched the COMUNIKOS project (COMmunicating UNcertainty in Key Official Statistics) which aims to conduct an in-depth methodological and empirical evaluation of a number of alternative approaches to measuring and communicating uncertainty as well to propose new methods and metrics in the official statistic setting. Although several statistical organisations have started to invest in identifying ways to measure and communicate data uncertainty, this is only being done randomly. This may lead to a misinterpretation of the statistical results by the users. In this paper we present an application of uncertainty in measuring economic well-being at local level, a crucial aspect that impacts both the design and evaluation of policies. We focus on the issue of measuring the accuracy of at risk of poverty rate (AROP) which is defined as the proportion of people with an equivalised total net income below 60% of the national median income and estimated from the European Union Statistics on Income and Living Conditions (EU-SILC) surveys. After reviewing the literature devoted to the computation of standard errors of traditional measures of monetary poverty and to the assessment of non-sampling errors, we estimate AROP standard errors for Italy taking into account the complex survey design and using linearization methods. Moreover, we provide estimates of standard error of AROP at regional level (NUTS-2) by also using equivalised income adjusted for price differences in order to better inform policy making. We use the 2017 wave of EU-SILC in which detailed information on the sample design are provided.3s