Change in the Perception of the Poverty Line During the Times of Depression: Russia, 1993-96

29 Pages Posted: 5 Jul 1999

See all articles by Branko Milanovic

Branko Milanovic

World Bank - Development Research Group (DECRG); University of Maryland

Branko Jovanovic

CapAnalysis

Date Written: March 1999

Abstract

Economic transition in Russia was accompanied by a precipitous decline in real income for most of the population. How was people's perception of a minimum income level needed to survive affected by such a rapid decline in their incomes? Based on individual-level data collected from repeated surveys over the period March 1993-September 1996, we find that the subjective estimate of a minimum income for an adult Russian decreased by about 1.7 percent each month. This sharp reduction of people's subjective poverty line in face of a decrease in real income meant that the percentage of the population feeling poor went down, even if it remained at a very high level (over 60 percent) throughout the entire period. This is in marked contrast with a simultaneous increase in the percentage of the "objectively" poor--that is those whose income was less than a given real poverty line.

JEL Classification: I3, P2

Suggested Citation

Milanovic, Branko and Jovanovic, Branko, Change in the Perception of the Poverty Line During the Times of Depression: Russia, 1993-96 (March 1999). Available at SSRN: https://ssrn.com/abstract=156090 or http://dx.doi.org/10.2139/ssrn.156090

Branko Milanovic (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

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HOME PAGE: http://econ.worldbank.org/staff/bmilanovic

University of Maryland ( email )

College Park
College Park, MD 20742
United States

Branko Jovanovic

CapAnalysis ( email )

Washington, DC 20004
United States

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