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Changes in the perception of the poverty line during the depression in Russia, 1993–96

Milanovic, Branko; & Jovanovic, Branko. (1999). Changes in the perception of the poverty line during the depression in Russia, 1993–96. The World Bank Economic Review, 13(3), 539.

Milanovic, Branko; & Jovanovic, Branko. (1999). Changes in the perception of the poverty line during the depression in Russia, 1993–96. The World Bank Economic Review, 13(3), 539.

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Economic transition in Russia was accompanied by a precipitous decline in real income for most of the population. This article analyzes how the decline affected people's perception of the minimum level of income needed to make ends meet. Individual-level data collected from repeated surveys between March 1993 and September 1996 reveal that the elasticity of subjective minimum income with respect to actual median income was 1.5 or that people's subjective estimate of the minimum income for an adult Russian fell about 1.7 percent each month. This sharp reduction in the face of a decrease in real income meant that the percentage of the population who felt that they were poor declined, even though poverty remained at a very high level (more than 60 percent of the population) throughout the period. This self-perception is in marked contrast to an “objective ” measure of poverty: the percentage of the population whose income was less than a given real poverty line rose.




JOUR



Milanovic, Branko
Jovanovic, Branko



1999


The World Bank Economic Review

13

3

539






0258-6770

10.1093/wber/13.3.539



1554