Analyzing the Monetary Poverty in Albania Using Statistical Methods

Poverty is a very widespread phenomenon directly related to consumption (or income) and other important problems of everyday life, such as the lack of appropriate infrastructure, security, quality of health and education, etc. Poverty is traditionally measured in monetary terms. After an aggregate income, expenditure is defined to measure poverty; the next step is the definition of one or more poverty lines. Based on a monetary concept, all individuals who fall under a certain line called poverty line are considered poor people.

This paper provides a definition of the monetary and non-monetary poverty concept. It focuses in statistical estimations for the relation between status of individual (poor-non poor) and family composite and education level of the head. We examine whether the changes in poverty level are reflected in the area (rural/urban) and regional levels by conducting stochastic dominance analysis for different areas and regions. The data for the analyses are from Albania LSMS 2012.

The paper ends with results of statistical testing and conclusions that emerge from the analysis used.

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