RESEARCH – October 2006

Poverty and its measurement. Poverty trends in Estonia


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The initial material for this study was derived from the family budget studies conducted by the Statistics Office of Estonia in the period 1996–2004. The study was participated by a total of more than 30,000 families and over 80,000 persons. All results were generalized for total population of Estonia per years. For in-depth analyses a pooled database of family budget studies for different years was used; part of the models were developed on
the basis of the data for recent years. As the final deadline of the study was the end of
2005, it cannot include the data for 2005, as poverty line can be recalculated and poverty rates can be assessed only after the final obtaining of the data for the current year, completion of their processing and official publication. At present, it can be said in advance that the line of absolute poverty for 2005 has increased by almost 100 Estonian kroons in comparison with 2004, while poverty rate has decreased.
The main approach of the study was related to methodology: to clarify the relationships between different notions of poverty, to find a possibility to link absolute poverty line and subsistence level in such a way that the continuity of time series is retained, and to assess, on the basis of empirical data, what kind of consumption proportions are the most suitable for Estonia at present.
Finally, the trends of absolute and relative poverty were analysed and the most important risk factors for poverty were established.