Social Spending and Household Welfare: Evidence from Azerbaijan
We measure the response of household consumption of different income groups to social spending during the 2002-2012 period using the aggregated Household Budget Survey Data. We find that households respond more strongly to changes in pensions than to changes in allowances and in-kind transfers. The very weak response of households to changes in allowances and in-kind transfers, both of which are transitory income, is consistent with the permanent income hypothesis. The estimates of pension elasticities suggest that the response of the low income group to changes in pensions is the strongest, whereas the response of the middle income group is the weakest. We further find that, in aggregate, households of all income groups do not exhibit habit persistence.
|Date of creation:||11 Feb 2014|
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- Mateusz Walewski & Alexander Chubrik, 2010. "Oil-led economic growth and the distribution of Real Household Incomes and Consumption in Azerbaijan," CASE Network Studies and Analyses 417, CASE-Center for Social and Economic Research.
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