Living Standards Measurements Study - Serbia 2002 - 2007

The assessed factors which significantly
influenced the consumption per adult equivalent are
the following: the size and demographic
composition of households, also location, farm size;
education and gender of the household head, labour
market status of the household head.
Household size had an adverse effect on the
household’s consumption: larger households had
lower consumption, being similar in all other
characteristics.
Increased share of adult men and women in
households had a positive effect on the consumption
in urban areas. With the increased share of adult
men in a household, assuming the unaltered
household size, consumption per adult equivalent
grows with respect to reference category (share of
children up to 7 years of age). The same effect on
the consumption, but smaller scale, is observed
among adult women. The share of other age groups
has not significantly influenced the consumption of
households in urban areas. In rural areas, the age
structure did not have a significant effect on
household consumption.
The location of a household plays an important
role in explaining consumption. Whether urban or
rural areas are concerned, persons who live in
Belgrade (reference variable) had the largest
consumption compared to other regions in Serbia,
whereas citizens in South East Serbia had the lowest,
under the assumption of other factors being the same.
In urban areas, the most affected citizens were those
living in South East Serbia given that their
consumption was 18 percent lower compared to
those living in Belgrade. The situation was similar in
rural areas, except that the differences in
consumption between the most prosperous and the
most chal-lenged region in Serbia were somewhat
more acute. In rural areas, persons who live in South
East Serbia had the consumption per adult equivalent
23 percent lower than those living in Belgrade.
According to these results, it may be inferred that
regional discrepancies in consumption are much
lower than those shown by the poverty profile (Table
8). The same conclusion has been derived by using
the data from HBS 2006 (Krstić and Sulla, 2007).
Farming a larger agricultural land significantly
increases the household consumption. People
who live in households that farm lands exceeding 3
hectares were in a much more favourable position
than others. Their consumption per adult equivalent
in urban areas was 15 percent higher compared to
Poverty profile in Serbia
such persons with no farmland and 26 percent
higher in rural areas.
Consumption was substantially higher in
households whose head has a college or university
degree. In urban areas, persons living in households
whose head have a college or university degree had
68 percent and 98 percent higher consumption,
respectively, compared to those whose head had no
school or incomplete primary school (reference
variable). In rural areas, these two categories had 77
percent and 84 percent higher consumption
respectively. These results comply with the results
of regression of employees’ wages according to
which wages of highly educated are significantly
higher compared to lower educational profiles,
under the assumption of other aspects of the
employees being the same (World Bank, 2006).
The gender of a household head in urban
areas had a significant effect on the household
consumption, under the assumption of the factors
being the same. In urban areas, persons living in
house-holds where a woman is the head had higher
consumption compared to those where a man is the
head (by 4.7 percent). In rural areas, the gender of
the household head had no significant effect on
consumption.
The labour market status of the household
head significantly influences the household consumption.
Households where an unemployed person
is the head had considerably lower consumption
than those with an employed head: 24 percent and
22 percent in urban and rural areas, respectively,
under the assumption of other aspects being the
same. This feature is evident even if other factors of
the household head are not kept the same (see Table
11 in poverty profile). Inactivity of the household
head in urban areas had no significant effect on
consumption, whereas in rural areas the
consumption of such households was 4 percent
lower.
1.12. Conclusion
1. A macroeconomic stability and a considerable
and continuous economic growth since 2000
were prerequisites for poverty reduction in
Serbia. However, the economic growth was
achieved with no employment growth, which
certainly attenuated the effect the economic
growth may have had upon poverty reduction
had the employment growth and unemployment
decline been achieved.
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