Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/122105
Authors: 
Rahmanov, Ramiz
Year of Publication: 
2014
Series/Report no.: 
Graduate Institute of International and Development Studies Working Paper 02/2014
Abstract: 
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.
Subjects: 
social spending
consumption
permanent income hypothesis
welfare
Azerbaijan
JEL: 
E21
E61
H24
H55
I31
Document Type: 
Working Paper

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