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Equivalence scales for measuring poverty in transitional Russia: Engel's food share method and the subjective economic well-being method

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  • Yuka Takeda

Abstract

This study estimates the equivalence scales for measuring poverty in transitional Russia using the Russia Longitudinal Monitoring Survey data of 1994 and 2002, i.e. before and after the 1998 economic crisis. To examine the robustness and plausibility of the two estimates, we compared the estimate results in both the periods. For constructing the equivalence scales, the costs of children and additional adults are estimated. Further, in order to investigate the most plausible equivalence scales for measuring poverty, the following two methods are employed for the estimations: Engel's food share method (Engel method) and the subjective economic well-being method (SW method). The estimation results show that the equivalence scales for a child, obtained from the Engel and SW methods, could be similar; however, the results for an additional adult are very different. It reveals that poverty evaluation is highly underestimated when the SW method is used. In conclusion, although the Engel method has a theoretical flaw, it might be more plausible than the SW method in the context of poverty evaluation for transitional Russia.

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  • Yuka Takeda, 2010. "Equivalence scales for measuring poverty in transitional Russia: Engel's food share method and the subjective economic well-being method," Applied Economics Letters, Taylor & Francis Journals, vol. 17(4), pages 351-355.
    • Handle: RePEc:taf:apeclt:v:17:y:2010:i:4:p:351-355
    DOI: 10.1080/13504850701748925
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    1. Tsakloglou, Panos, 1991. "Estimation and Comparison of Two Simple Models of Equivalence Scales for the Cost of Children," Economic Journal, Royal Economic Society, vol. 101(405), pages 343-357, March.
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    3. Jin-Long Liu & Ching-Chun Hsu, 2004. "Economies of scale, gender discrimination, and cost of children," Applied Economics Letters, Taylor & Francis Journals, vol. 11(6), pages 377-382.
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    5. Ferrer-i-Carbonell, Ada & van Praag, Bernard M. S., 2001. "Poverty in the Russian Federation," IZA Discussion Papers 259, Institute of Labor Economics (IZA).
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    1. Ahlheim, Michael & Schneider, Friedrich, 2013. "Considering Household Size in Contingent Valuation Studies," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79974, Verein für Socialpolitik / German Economic Association.
    2. Abanokova, Kseniya & Dang, Hai-Anh H & Lokshin, Michael, 2020. "The Important Role of Equivalence Scales: Household Size, Composition, and Poverty Dynamics in Russia," IZA Discussion Papers 13043, Institute of Labor Economics (IZA).
    3. Kseniya Abanokova & Hai-Anh H. Dang, 2023. "Poverty in Russia: a bird’s-eye view of trends and dynamics in the past quarter of a century," Chapters, in: Jacques Silber (ed.), Research Handbook on Measuring Poverty and Deprivation, chapter 58, pages 627-635, Edward Elgar Publishing.
    4. Kseniya Abanokova & Hai‐Anh H. Dang & Michael Lokshin, 2022. "Do Adjustments for Equivalence Scales Affect Poverty Dynamics? Evidence from the Russian Federation during 1994–2017," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(S1), pages 167-192, April.
    5. Kseniya Abanokova & Hai-Anh H. Dang & Michael M. Lokshin, 2020. "The Important Role of Equivalence Scales: Household Size, Composition, and Poverty Dynamics in the Russian Federation," Working Papers 539, ECINEQ, Society for the Study of Economic Inequality.

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