Living Standards Measurements Study - Serbia 2002 - 2007

As an additional example of the assessed
sensitivity of the poverty index and its change in the
2002-2007 period regarding the poverty line choice,
Table 3 shows a relevant change in the poverty
index as the poverty line increases and/or decreases
by 5, 10 and 20 percent. Whether there is an
increase or a decrease in the poverty line, it is
evident that the percentage of the poverty index
change is considerably higher compared to the
percentage of the poverty line change. It points to a
large concentration of population in proximity to the
poverty line. Even though an increase in the poverty
line would apparently increase the proportion of the
poor population, the extent of the poverty index
decline between 2002 and 2007 would remain
almost unchanged compared to the actual poverty
decline (approximately 52 percent versus 53
percent). On the other hand, a poverty line decline
would reduce the proportion of the poor population,
but the poverty reduction would still remain almost
unaltered (approximately 56 percent versus 53
percent). These estimates confirm that the
considerable poverty decline in the 2002-2007
period does not depend on the poverty line choice.
Table 1.3. Poverty index sensitivity to the change in poverty line, 2002-2007
Actual, 8883
dinars
Poverty index,
percent
2002 2007
Percent change
compared to the
actual
Poverty index,
percent
Percent change
compared to the
actual
Percent change
‘07/’02
14.0 0.00 6.6 0.00 -53.03
+5 percent 16.3 16.19 7.8 17.70 -52.42
+10 percent 18.5 32.11 8.9 35.51 -51.82
+20 percent 24.1 71.65 11.8 79.63 -50.85
-5 percent 11.4 -18.54 5.0 -24.04 -56.20
-10 percent 9.9 -29.39 4.2 -35.83 -57.31
-20 percent 6.5 -53.40 2.9 -55.85 -55.50
1.3. Subjective poverty
In addition to poverty assessment defined
according to consumption of population, which will
be called “objective” poverty assessment, poverty
is also based on a subjective assessment of LSMS
respondents. To define subjective poverty, we used
respondents’ answers to the question about the
minimum funds a household requires to cover its
basic needs. In order to compare the relation
between subjective and objective poverty, the
poverty line defined according to consumption of
population (5 234 dinars in 2002 and 8 883 dinars
per adult equivalent per month in 2007) was
applied to subjective assessment of respondents
concerning the minimum amount required to cover
basic needs.
Graph 1.3. Percentage of the poor population –
subjective and “objective” assessments,
2002-2007
18,0
13,0
Subjective poverty
2002 2007
13,4
6,6
"Objective" poverty
Poverty profile in Serbia
13