Azerbaijan's Household Survey Data Explaining Why Inequality Is So Low

While the Azerbaijan household income and expenditure survey (HIES) data satisfy most empirical regularities expected in a typical household survey data, the unequality measures based on the data are unusually low. For example, for the latest three years for which we have data (2002 - 2004), the con...

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Bibliographic Details
Main Author: Ersado, Lire
Format: eBook
Language:English
Published: Washington, D.C The World Bank 2006
Subjects:
Online Access:
Collection: World Bank E-Library Archive - Collection details see MPG.ReNa
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300 |a 19 p. 
653 |a Macroeconomics and Economic Growth 
653 |a Household Income 
653 |a Poverty Impact Evaluation 
653 |a Human Development 
653 |a Income On Food 
653 |a Household Surveys 
653 |a Small Area Estimation Poverty Mapping 
653 |a Rural Development 
653 |a Economic Growth 
653 |a Household Consumption 
653 |a Food Consumption 
653 |a Rural Poverty Reduction 
653 |a Inequality 
653 |a Household Survey 
653 |a Poverty Reduction 
653 |a Services and Transfers to Poor 
653 |a Consumption Expenditures 
653 |a Consumption 
653 |a Economic Theory and Research 
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520 |a While the Azerbaijan household income and expenditure survey (HIES) data satisfy most empirical regularities expected in a typical household survey data, the unequality measures based on the data are unusually low. For example, for the latest three years for which we have data (2002 - 2004), the consumption Gini coefficient (the commonly used summary measure of inequality) is in the range of 16 - 18 percent. This is among the lowest Gini coefficients ever observed in any country, and is extremely low even with the standard of countries generally considered as most equal in the world. Azerbaijan, a transitional economy with a significant natural resource base, is unlikely to be the most equal country in the world. The objective of this paper is to investigate why inequality measures are unusually low in the Azerbaijan household survey data. The author presents a methodology for diagnosing and identifying the potential sources of low inequality in the data, including cluster analysis at the primary sampling unit level. The main inference from the findings of the cluster analysis is that the observed low inequality indices are not due to poor supervision of the interviewers and the data collection process. The author finds that the main culprits for the observed low inequality in the HIES data are (1) the low participation rates of wealthy households in the household surveys, and (2) the widespread availability of well-targeted public and private transfers