Some Explanations for Changes in the Distribution of Household Income in Slovakia: 1988 and 1996

This paper measures the change in overall net monetary income inequality during the first seven years of transition and considers the relative importance of two possible explanations for the increase in inequality: a) changes in the sources of household income, and b) changes in the household composition. Changes in the sources of household income reflect the role of the government and market during the transition period, while changes in household composition reflect social reactions to the changing economic environment. We find that the increase in inequality in labor income drove the large increase in inequality (i.e., the Gini index of household per capita income rose from 0.195 in 1988 to 0.263 in 1996). Changes in the distribution of pensions and other social payments mitigated the rise in earnings inequality, with the latter playing a more role in reducing changes overall income inequality over time. We show there are large shifts in the demographic composition of households over this period: far fewer households with children, far more households headed by pensioners, increases in the number of one-person households and decreases in large (five person) households. Although we find that these shifts in the demographic composition of households are increasing overall inequality, by increasing between group inequality, most of the change in inequality over time is accounted for by increase in within group inequality. We conclude that over the first seven years of the transition labor market forces are driving changes in overall inequality in Slovakia to a much greater extent than changes in the Government's social safety net or in individual's decisions about household formation.http://deepblue.lib.umich.edu/bitstream/2027.42/39761/3/wp377.pd

Developing a New Poverty Line for the USA: Are There Lessons for India?

This paper reviews a procedure that is being followed in the United States of America (USA) to experimentally test and evaluate recommendations made for redefining poverty measurement in that country. The recommendations were made in 1995 by the US National Academy of Sciences (NAS) Panel on poverty measurement. In this paper these recommendations are reviewed and the impact of implementing the recommendations on measures of inequality and poverty are examined. In conclusion, a discussion concerning possible lessons for India is provided. The recommended poverty measure (based on new measures of thresholds and resources) is examined in terms of its impact on inequality statistics, as well as poverty statistics, and results are compared to similar statistics based on the official measure. The standard Gini index, and three generalized entropy inequality measures are used to examine inequality. For the poverty analysis simple head count ratios, poverty gaps, and Foster-Greer-Thorbecke poverty measures are computed. Data from the 1991 U.S. Consumer Expenditure Survey (CE) Interview are used to produce the thresholds, and data from the 1992 through 1997 Current Population Survey (CPS), and in some analyzes, the 1991 panel of the Survey of Income and Program Participation (SIPP), are used to define resources. The proposed measure produces a distribution of resources that is, in general, more equal than is the distribution of official income. The poverty analysis reveals that changes in the poverty rates based on the official and the experimental measures are similar over time. However, poverty as measured by the NAS measure is greater than official poverty. The experimental poverty measure yields a poverty population that looks slightly more like the total U.S. population in terms of various demographic and socioeconomic characteristics than does the current official measure. Geographically adjusting the thresholds results in greater equality and lower poverty rates than when non-adjusted thresholds are used. With regard to India, poverty measurement is likely not to be based on income and expenditures primarily. Alternative measures based on other needs and resources are reviewed. However, regardless of the measure used, systematic evaluations of the measure are necessary and the USA model may be one to consider in this evaluation process.poverty, Consumer Expenditure Survey, India

Economic Well-Being Based on Income, Consumer Expenditures and Personal Assessments of Minimal Needs

Responses to minimum income and minimum spending questions are used to produce economic well-being thresholds. Thresholds are estimated using a regression framework.  Regression coefficients are based on U.S. Survey of Income and Program Participation (SIPP) data and then applied to U.S. Consumer Expenditure Survey (CE) data. Three different resource measures are compared to the estimated thresholds.  The first resource measure is total before-tax money income, and the other two are expenditure based.  The first of these two refers to expenditure outlays and the second to outlays adjusted for the value of the service flow of owner-occupied housing (rental equivalence). The income comparison is based on SIPP data while the outlays comparisons are based on CE data. Results using official poverty thresholds are shown for comparison. This is among the earliest work in the U.S. in which expenditure outlays have been used for economic well-being determinations in combination with personal assessments, and the first time rental equivalence has been used in such an exercise. Comparisons of expenditures for various bundles of commodities are compared to the CE derived thresholds to provide insight concerning what might be considered minimum or basic. Results reveal that CE and SIPP MIQ thresholds are higher than MSQ thresholds, and resulting poverty rates are also higher with the MIQ.  CE-based MSQ thresholds are not statistically different from average expenditure outlays for food, apparel, and shelter and utilities for primary residences.  When reported rental equivalences for primary residences that are owner occupied are substituted for out-of-pocket shelter expenditures, single elderly are less likely to be as badly off as they would be with a strict outlays approach in defining resources.well-being, sufficiency, poverty, income, expenditures, Consumer Expenditure Survey, Survey of Income and Program Participation

Personal Assessments of Minimum Income and Expenses: What Do They Tell Us about 'Minimum Living' Thresholds and Equivalence Scales?

Subjective minimum income (MIQ) and minimum spending (MSQ) are the study focus. Basic Needs Module (1995) data from the U.S. Survey of Income and Program Participation are analyzed. A regression intersection approach is used to estimate household thresholds. MIQ thresholds are higher than MSQ thresholds. Both are higher than U.S. official poverty thresholds, and thresholds based on a National Academy of Sciences (NAS) methodology. Subjective threshold based equivalence scales imply greater economies of scale than those in the other two measures but are similar to behavioral scales. This finding suggests that families make trade-offs to meet their minimum needs.well-being, sufficiency, poverty, expenditures, SIPP

Creating a Consistent Poverty Measure Over Time Using NAS Procedures: 1996-2005

This paper presents an experimental poverty measure and compares it to the current official measure, now more than 40 years old. The experimental measure is based on an approach, drawn from work by a National Academy of Sciences (NAS) expert Panel, to consistently define basic needs and family resources. The experimental thresholds are based on out-of-pocket spending by families on basic goods and services and are based on an “outflows” concept. The resource measure is based on an “inflows” concept and reflects money coming into the household that is available to meet one’s basic needs. The U.S. Consumer Expenditure Survey serves as the basis for the experimental thresholds and the Current Population Survey Annual Social and Economic Supplement serves as the basis for the resource measure. Results for 1996 to 2005 are reported with trends examined. An important finding is that increases in expenditures for shelter and utilities, captured in the new thresholds, suggest a greater increase in the number of families not able to meet basic needs than is reflected by the official poverty statistics.NAS, Poverty, Consumer Exenditure Survey, Current Population Survey

The influence of demographic and household specific price indices on expenditure based inequality and welfare: A comparison of Spain and the united states.

The purpose of this research is to examine the role of household size and household specific price indices on inequality and welfare measurement in Spain and the O.S. Total household expenditures from each countries' 1990-91 consumer expenditure surveys, with adjustments to reflect more accurately households' current consumption, are used as the basis for the analysis. Household size scale factors are used to produce adjusted expenditures. Household specific price indices are used to expresss the 1990-91 expenditure distribution at winter of 1981 and winter of 1991 prices. Decomposable measurement instruments are used both for the inequality and social welfare analyses. Our results show that wide differences in household size can be very important in international comparisons. Inequality and welfare comparisons are drastically different for smaller and larger households. For both countries we find that from the point of view of winter 1981, the amount of expenditures that we would need to give to richer households to compensate them for inflation, over the 1981 to 1991 period, would be greater than the amount that we would need to give to poorer households for them to be able to acquire the same bundle of goods. Our inequality comparisons are robust to the choice of the reference price vector.Theil inequality; Wealfare; Demographic factors; household expenditures; Household price indexes;

The influence of demographic and household specific price indices on expenditure based inequality and welfare: a comparison of Spain and the United States

The purpose of this research is to examine the role of household size and household specific price indices on inequality and welfare measurement in Spain and the O.S. Total household expenditures from each countries' 1990-91 consumer expenditure surveys, with adjustments to reflect more accurately households' current consumption, are used as the basis for the analysis. Household size scale factors are used to produce adjusted expenditures. Household specific price indices are used to expresss the 1990-91 expenditure distribution at winter of 1981 and winter of 1991 prices. Decomposable measurement instruments are used both for the inequality and social welfare analyses. Our results show that wide differences in household size can be very important in international comparisons. Inequality and welfare comparisons are drastically different for smaller and larger households. For both countries we find that from the point of view of winter 1981, the amount of expenditures that we would need to give to richer households to compensate them for inflation, over the 1981 to 1991 period, would be greater than the amount that we would need to give to poorer households for them to be able to acquire the same bundle of goods. Our inequality comparisons are robust to the choice of the reference price vector

Changes in the distribution of slovak household income: 1988 and 1996

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/43926/1/11294_2005_Article_BF02295358.pd

Changes in Distribution and Welfare in Transition Economies: Market vs. Policy in the Czech Republic and Slovakia

http://deepblue.lib.umich.edu/bitstream/2027.42/39467/3/wp77.pd