The Important Role of Equivalence Scales: Household Size, Composition, and Poverty Dynamics in Russia

53 Pages Posted: 30 Mar 2020

See all articles by Kseniya Abanokova

Kseniya Abanokova

National Research University Higher School of Economics

Hai-Anh Dang

World Bank - Development Data Group (DECDG)

Michael Lokshin

World Bank - Development Research Group (DECRG); National Research University Higher School of Economics

Abstract

Hardly any literature exists on the relationship between equivalence scales and poverty dynamics for transitional countries. We offer a new study on the impacts of equivalence scale adjustments on poverty dynamics for Russia, using the equivalence scales constructed from subjective wealth and more than 20 waves of household panel survey data from the Russia Longitudinal Monitoring Survey. Our analysis suggests that the equivalence scale elasticity is sensitive to household demographic composition.The adjustments for the equivalence of scales result in lower estimates of poverty lines. We decompose poverty into chronic and transient components and find that chronic poverty is positively related to the adult scale parameter. Chronic poverty, however, is less sensitive to the child scale factor compared to the adult scale factor. Interestingly, the direction of income mobility might change depending on the specific scale parameters that are employed. Our results are robust to different measures of chronic poverty, income expectations, reference groups, functional forms, and various other specifications.

Keywords: poverty, poverty dynamics, equivalence scale, Russia, panel survey

JEL Classification: I30, J10, O15

Suggested Citation

Abanokova, Kseniya and Dang, Hai-Anh H. and Lokshin, Michael, The Important Role of Equivalence Scales: Household Size, Composition, and Poverty Dynamics in Russia. IZA Discussion Paper No. 13043. Available at SSRN: https://ssrn.com/abstract=3562833

Kseniya Abanokova (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Hai-Anh H. Dang

World Bank - Development Data Group (DECDG) ( email )

1818 H. Street, N.W.
MC2-846
Washington, DC 20433
United States

HOME PAGE: http://sites.google.com/site/haianhhdang/

Michael Lokshin

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

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-1772 (Phone)
202-522-1153 (Fax)

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

National Research University Higher School of Economics

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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