Do Adjustments for Equivalence Scales Affect Poverty Dynamics? Evidence from the Russian Federation during 1994–2017

Abstract

Hardly any literature exists on the relationship between equivalence scales (ESs) and poverty dynamics for transitional countries. We analyze ESs constructed from subjective wealth and more than 20 waves of household panel survey data from the Russia Longitudinal Monitoring Survey between 1994 and 2017. We find that the ES elasticity is sensitive to household demographic composition and ES adjustments 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. However, chronic poverty is less sensitive to the child scale factor compared with the adult scale factor. Interestingly, the direction of income mobility might change depending on the specific scale parameters that are employed. The results are robust to different measures of chronic poverty, income expectations, reference groups, functional forms, and various other specifications.

Female Headship and Poverty in the Arab Region: Analysis of Trends and Dynamics Based on a New Typology

“…The overarching finding is that the parameter dictating the economies of scale and the privatepublic nature of household consumption contributes non-trivially to the poverty ranking between FHHs and non-FHHs across most countries and FHH definitions, while the child parameter having a comparatively smaller impact compared to household size. These results mirror our earlier observation in Abanokova et al (2022) regarding the sensitivity of income dynamics to scale parameters.…”

“…In particular, when assessing consumption on a per capita basis (i.e., when β=1 and θ=1), selfreported FHHs consistently exhibit a higher probability of escaping poverty than non-FHHs and it holds true across all countries. Intriguingly, these findings align with those in Abanokova et al (2022), which demonstrated a persistent upward mobility when income is evaluated on a per capita basis.…”

“…Furthermore, a related economics literature on equivalence scales suggests that scale adjustments (for different numbers of adults and children) could have substantial effects on poverty and profiles of the poor for various countries at different income levels (Lanjouw and Ravallion, 1995;Newhouse et al, 2017;Abanokova et al, 2022). This is especially relevant for FHHs; for example, FHHs tend to have lower numbers of household members, but higher dependency ratios (World Bank, 2011;Klasen et al, 2015).…”

Erratum

“…In the article Abanokova, Lokshin and Dang (2022), the order of the authors was incorrect in the published version. The correct order of authors is: Kseniya Abanokova, Hai‐Anh H. Dang and Michael Lokshin.…”