Towards cross-country comparable reference budgets in Europe: a methodological note on the development of food baskets

Abstract

An adequate minimum income is imperative for the fight against poverty and for the realization of human rights (Cantillon et al., 2019; Van Lancker et al., 2020). A safety net that secures a decent level of minimum income is not only imperative for the fulfilment of other rights but is also a right in itself. The right to an adequate minimum income has been a long-standing commitment of the EU and its Member States and is one of the key principles in the European Pillar of Social Rights (EPSR) endorsed by all EU institutions and the Member States (European Commission, 2017). Principle 14 specifically addresses the right to an adequate minimum income that ensures a life in dignity, emphasizing the importance of labor market participation and access to enabling goods and services. Recently, this has been further elaborated and supported by the European Commission and Council by means of a Recommendation on adequate minimum income (Council of the European Union, 2022). While these EU initiatives are important steps forward towards adequate minimum incomes in Europe, we have argued (Storms et al. 2023) that besides the income-based AROP-indicator, there is a need for a benchmark that represents the costs that households face to access necessary goods and services. More specifically, we advocate the development and use of high-quality reference budgets (RBs) as a benchmark providing a sound multi-dimensional understanding of what social safety nets should entail in order to guarantee a life in dignity at all stages of life. RBs are priced baskets of goods and services that illustrate what households need in order to be able to live a dignified life. If the adequacy of minimum incomes is to be monitored at the European level, there is a need for RBs that are comparable across the member states. In previous EU projects {Goedemé, Storms, Penne & Van den Bosh, 2015a; Goedemé, Storms, Stockman, Penne, Van den Bosch, 2015b; Menyhért et al., 2021) first attempts have been made towards the development of cross-nationally comparable RBs (RB) in Europe. In the context of the current EuSocialCit project, additional steps have been taken towards more comparability. More specifically, the methodology to develop and price cross-nationally comparable food baskets representing a healthy and sustainable diet has been further elaborated and implemented in four European countries (Belgium, Finland, Hungary and Spain). In the current methodological note, we outline the methodological choices and considerations and the necessary steps for the future development of RBs across Europe. More specifically, we investigated how the methodology of developing comparable food baskets can be enhanced. Besides adding a layer of common guidelines and improving the pricing strategy, we have also investigated the feasibility of including sustainability criteria at different levels to construct the food budgets. Although food budgets alone are insufficient to fully assess the adequacy of minimum incomes, the note aims to illustrate how these comparable food baskets are a first step for measuring both affordability of necessary goods and services and income adequacy in a comprehensive way across Europe.