© 1999 International Bank for Reconstruction and Development / The World Bank
research-article |
Changes in the Perception of the Poverty Line During the Depression in Russia, 1993–96
Branko Milanovic is with the Development Research Group at the World Bank, and Branko Jovanovic is with the Economics Department at Texas A&M University and the Development Research Group at the World Bank. Their e-mail addresses are bmilanovic{at}worldbank.org and bjovanovic{at}worldbank.org. The authors gratefully acknowledge comments from Jeanine Braithwaite, Christine Jones, Misha Lokshin, and three anonymous referees. The research was financed by World Bank research grant RPO 681–42.
Economic transition in Russia was accompanied by a precipitous decline in real income for most of the population. This article analyzes how the decline affected people's perception of the minimum level of income needed to make ends meet. Individual-level data collected from repeated surveys between March 1993 and September 1996 reveal that the elasticity of subjective minimum income with respect to actual median income was 1.5 or that people's subjective estimate of the minimum income for an adult Russian fell about 1.7 percent each month. This sharp reduction in the face of a decrease in real income meant that the percentage of the population who felt that they were poor declined, even though poverty remained at a very high level (more than 60 percent of the population) throughout the period. This self-perception is in marked contrast to an "objective " measure of poverty: the percentage of the population whose income was less than a given real poverty line rose.
CiteULike 
Connotea 
Del.icio.us What's this?
This article has been cited by other articles:
|
|
 |
|
  H. Litwin and E. V. Sapir Perceived Income Adequacy Among Older Adults in 12 Countries: Findings From the Survey of Health, Ageing, and Retirement in Europe Gerontologist, June 1, 2009; 49(3): 397 - 406. [Abstract] [Full Text] [PDF]
|
|