Using Implicit Rental Cost as a Measure of Poverty

Social exclusion is often accompanied by spatial detachment which usually has a form of concentration of socially excluded households in segments of cheap housing of less quality or otherwise unattractive housing. In our analysis we analyse whether we can identify such socially excluded households in the data using housing costs indicators. We concentrate only on the rental segment of the housing market. We argue that existence of households which have to pay an inadequately high rent makes the possibility for poverty identification, especially if we compare the actual housing costs with the costs implicit. In the results section we present information on these households and discuss whether we identified the right group. Besides the data analysis we show that the interplay of individual parts of the housing policy led to a situation when some households pay an inadequately high rent which the state considerably contributes to. Although the problem concerns about 1% of Czech households, consequences of a failure to solve the situation can be critical for both the citizens themselves and the public sector. Our paper may serve as a basis for future analysis of alternative policy impacts.