Subjective aspects of economic poverty. Ordered response model approach
AbstractPaper analyses subjective economic welfare and well-being in Polish households. The study is based on the Household Budget Survey carried out by the Central Statistical Office in Poland. Subjective measures are estimated using households’ answers to questions about the own satisfaction with their financial situation. The inspiration for this research comes from Schwarze’s article  where ordered logit model was applied to estimate the equivalence scale elasticity. Such model implicitly assumes that the effects of the explanatory variables are identical at each cut-off point between categories, what is known as the “parallel regression assumption”. Paper indicates the violation of this assumption for the sample of Polish households of retirees as the whole, while the assumption cannot be rejected when we exclude the poorest and richest households. Some of the paper’s results are similar to typical findings in poverty research, such as U-shaped relationship between age and subjective income satisfaction. Different results are found with regard to gender of household head. Also, as compared with other research for Polish data, the method applied here produces higher equivalence scale elasticity.
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Bibliographic InfoPaper provided by Department of Applied Econometrics, Warsaw School of Economics in its series Working Papers with number 29.
Length: 19 pages
Date of creation: 27 Oct 2008
Date of revision:
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More information through EDIRC
subjective economic welfare; equivalence scale elasticity; logit model;
Find related papers by JEL classification:
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
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