Kseniya Abanokova1, Michael Lokshin1
  • 1 National Research University Higher School of Economics, 20 Myasnitskaya Str., Moscow, 101000, Russian Federation

The Effect of Adjustment for Economies of Scale in Household Consumption on Poverty Estimates in Russia

2014. Vol. 18. No. 4. P. 620–644 [issue contents]
The official poverty measurements in Russia are based on per capita welfare aggregate. We estimate economies on household size in consumption by different methodologies ranging from methods based on Engel curves to estimations of economies of scale using subjective questions. We demonstrate that, regardless of the method, larger households can reach a given level of wellbeing with less resource per capita compared to smaller households. The aggregate poverty estimates and composition of the poor derived with adjustments on household size will differ significantly from the Russian official statics. We suggest that Russian welfare programs might suffer from leakages and undercoverage because they overestimate the extent of poverty among large households. We also find that scale economies changed significantly from 1994 to 2011. Taking into account the economies of scale in household consumption might affect both size and a profile of the groups targeted by anti-poverty programs. The knowledge about scale economies at a point in time is crucial for poverty measurement and policy implementation. Moreover, as attention has shifted to targeting the antipoverty strategies at groups vulnerable to poverty, the reliable demographic poverty profiles hold considerable policy interest. The knowledge about dynamics of scale economies is useful for comparability of poverty profiles over time.

Citation: Abanokova K., Lokshin M. (2014) Vliyanie effekta masshtaba v potreblenii domokhozyaystv na bednost' v Rossii [The Effect of Adjustment for Economies of Scale in Household Consumption on Poverty Estimates in Russia]. HSE Economic Journal, vol. 18, no 4, pp. 620-644 (in Russian)
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