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ორშაბათი | 09 ნოემბერი, 2015

Household income and consumption patterns in Georgia

After the collapse of the Georgian economy in the 1990s, the country slowly started to recover, and between 2000 and 2014, the gross national income grew from $3.4 billion to $16.7 billion (in current USD). According to the National Statistics Office of Georgia, the official unemployment rate in Georgia was 12.4% in 2014, but according to numerous surveys the rate is much higher. Compounding matters, the low salaries of the majority of those who are employed make it difficult for many families to make ends meet. According to World Bank statistics in 2012, 15% of Georgians still live below the national poverty line, which is slightly under $1.25 a day.

Classic micro-economic theory tells us that consumption depends on income levels, but also on the type of good. Normal goods, a good example of which in Georgia would be an Opel Astra if we are talking about cars, are consumed less when income falls. Inferior goods, on the other hand, are consumed when consumers do not have enough money to buy something better – with cars, one would choose a Zaporozhets instead of an Opel. Or, when a family’s budget is tight, they might buy no-name sports shoes rather than Nikes, or a standard mobile phone rather than a smart phone. Finally, demand for luxury goods (a Land Rover instead of an Opel) increases more than proportionately as incomes increase.

Recently, we saw that most people in Armenia, Azerbaijan, and Georgia cannot afford to buy certain durable goods. But, when income is scarce, it also obviously influences everyday choices, such as what to eat for dinner, when to turn on the heater, and whether to buy your child that chocolate bar she really wants.  

So how does the consumption of everyday goods differ by income level in Georgia? The chart below shows the percentage of households in Georgia which report restricting consumption of certain foods because of their limited income.


Note: The original scale measuring household income was recoded for this chart. GEL was converted into USD. The income groups “USD 401-800”, “USD 801-1200” and “More than USD 1200” were combined into “More than USD 400” and the groups “USD 0”, “Up to USD 50” and “USD 51-100” were combined into  “Up to USD 100”. Only “yes” answers are reported. Error bars indicate a 95% confidence interval.

As expected, the percentages of households limiting consumption differ by income group, with households in the highest income group limiting their consumption the least. Importantly, this trend is obvious in spite of the fact that we did not control for the size of households for this blog posts, i.e. did not take into account per capita income of the household members, or number of children or elderly in the households.

Even in the group with the highest household income, about one in four households limits consumption of beef – and reports doing so solely due to budgetary difficulties. In the $251-400 income group, between 8% (potatoes) and 54% (beef) of Georgians say they restrict consumption of certain goods. In households with an income between $101-250 these shares increase to 14% and 76%. In the poorest households, with less than $100 income per month, four out of five households report limiting consumption of beef and one out of five limits even the consumption of staple foods like potatoes.

In each income group, the highest percentage of households limits consumption of beef and sweets/chocolate, while the smallest percentage limits consumption of potatoes. Milk and vegetables are somewhere in between. In addition to the obvious explanation suggesting that higher shares of households limit consumption of beef and sweets/chocolate simply because these are relatively expensive, this trend might also be explained by what economist call income elasticity of demand. The concept is a measure of how sensitive consumption is to changes in income. Among food products, beef and sweets are probably seen more as luxury rather than absolute necessities, because of comparatively high prices and potential substitutes.

Hence, how Georgians limit their food consumption differs by both income group and type of food. Yet, looking at this issue only from the monetary income perspective does not take into account cases when, in rural settlements, families produce their food themselves.

Interested in this or a similar topic? Browse the Caucasus Barometer and other CRRC survey data here.
12.10.2015 | ორშაბათი

The development of Azerbaijani think tanks and their role in public policy discourse

[Editor's note: This is the fourth in a series of blog posts co-published with On Think Tanks. The views expressed within this blog series are the authors alone, and do not represent the views of CRRC-Georgia.]

By Zaur Shiriyev

The development of local think tanks in Azerbaijan has taken a different route to that followed by most other post-Soviet states and Eastern European countries. In the Eastern Bloc countries, research institutes modeled on Western think tanks became increasingly popular following the collapse of the Soviet Union. However, in Azerbaijan this did not happen, largely due to domestic political developments in the early 1990s.
05.10.2015 | ორშაბათი

Think Tanks in Armenia: Who Needs their Thinking?

[Editor's note: This is the third in a series of blog posts co-published with On Think Tanks. The views expressed within this blog series are the authors alone, and do not represent the views of CRRC-Georgia.]

By Yevgenya Jenny Paturyan

Think tanks are considered to be an important part of civil society: providers and keepers of expertise on important social, economic, environmental, political and other issues. Organizations like Chatham House and Carnegie Endowment for International Peace come to mind. In addition to ‘pure’ think tanks, there is a plethora of organizations that combine research with advocacy and action, Transparency International being a prominent example.
29.09.2015 | სამშაბათი

The lay of the land: An interview with Hans Gutbrod on think tanks in the South Caucasus

[Editor's note: This is the second in a series of blog posts co-published with On Think Tanks. The views expressed within this blog series are the authors alone, and do not represent the views of CRRC-Georgia.]

Interview by Dustin Gilbreath

Dustin Gilbreath: You recently recently pointed out that think tanks in the South Caucasus have come a long way in recent years, but that they still face challenges on some of the fundamentals – quality of research, policy relevance, funding, and operational acumen.  At the national rather than regional level, what are the relative strengths of and challenges before the think tank sector of each country?
28.09.2015 | ორშაბათი

Thinking about think tanks in the South Caucasus

[Editor's note: This is the first in a series of blog posts co-published with On Think Tanks. The views expressed within this blog series are the authors alone, and do not represent the views of CRRC-Georgia]

By: Dustin Gilbreath

Starting from similarly troubled slates at the turn of independence, the South Caucasus countries – Armenia, Azerbaijan, and Georgia – have diverged over the last 25 years, and the region is an interesting case of divergence despite similarity. While in Azerbaijan the government is squeezing the last bit of free expression from the country, Georgia is having its problems but is by far the freest place in the region. Armenia still has space for engagement, but it is not as open as Georgia.
08.08.2015 | შაბათი

What do CB interviewers’ ratings of respondents’ intelligence tell us?

CRRC’s Caucasus Barometer (CB) surveys regularly collect information about how the interviewers assess each of the conducted interviews – so called paradata that provides additional insight into the conditions surrounding the interviews (e.g., whether someone besides the respondent and the interviewer was present during the face-to-face interview), as well as interviewers’ subjective assessments of, for example, level of sincerity of the respondents.
15.06.2015 | ორშაბათი

Trust in institutions in the South Caucasus – generating a combined score

Trust in institutions is a widely studied subject in the social sciences – typing 'trust in institutions' into Google Scholar yields roughly 2.5 million results. It is generally believed to have multi-directional relationships with different aspects of social life, with high levels of trust associated with positive phenomena – acceptance of innovation and a good business environment just to name two.
13.05.2014 | სამშაბათი

Common Challenges Facing the Elderly in Georgia

According to the World Health Organization (WHO), “Multiple social, psychological, and biological factors determine the level of mental health of a person at any point in time. In addition to the typical life stressors common to all people, older people are more likely to experience events such as bereavement, a drop in socioeconomic status with retirement, or a disability.”
19.05.2014 | ორშაბათი

Paternalism in Georgia

According to the Stanford Encyclopedia of Philosophy, paternalism is “the interference of a state or an individual with another person against their will motivated by a claim that the person interfered with will be better off or protected from harm” (from the Latin pater for father). Simply put, paternalism refers to treating people as if they were children. The Caucasus Barometer (CB) assesses attitudes toward governance among Georgians. Who thinks citizens should be treated like children by the government (i.e. the paternalistic view) rather than as employers? Using data from the CB 2013, this blog post focuses on the following qualities of citizens: education level, economic condition and source of household income in order to better understand this paternalistic view in Georgia.
28.05.2014 | ოთხშაბათი

Smoking in the South Caucasus and tobacco policy in Azerbaijan

May 31st is World No Tobacco Day as declared by the United Nations. According to the World Health Organization (WHO), tobacco usage is the primary reason for chronic diseases including “cancer, lung diseases, cardiovascular diseases” among other diseases.
21.07.2014 | ორშაბათი

Friends and Enemies in the South Caucasus

On 1 April, 2014 the International School of Economics at Tbilisi State University (ISET) published a blog which described a future Transcaucasian Confederation agreement signed by the three South Caucasian states. Despite the fact that the blog was an April Fool’s Day joke, it provoked significant interest and reader response.
29.09.2014 | ორშაბათი

Georgians Have High Hopes but Little Information about the Association Agreement with the EU

Optimism abounds with regards to the recently signed Georgia-European Union Association Agreement (AA). Most Georgians, however, lack information about the EU and its relation to the country, including the details of the agreement which directly concern the future of Georgia’s economy. The AA covers many areas including national security, migration, human rights and the rule of law but is primarily a free trade agreement with potentially major implications for employment.
07.10.2014 | სამშაბათი

The Wave of the Future: Optimism, Pessimism and Fatalism in Georgia

A recent CRRC regional blog post analyzed the presence of fatalism in Georgia. The post cited CRRC Caucasus Barometer (CB) data which shows that in 2013, 28% of Georgians agreed that “everything in life is determined by fate.” While the CB findings demonstrate that a sizeable portion of the adult population is fatalistic about the future, Georgians are increasingly likely to see that future in a positive light, whether it be determined by fate or not.
03.11.2014 | ორშაბათი

The recent history of the South Caucasus as seen by the world’s media – Part 1, Armenia and Azerbaijan

History has been a qualitative discipline and has often been considered part of the humanities, well, historically, but the emergence of big data is likely to extend the use of quantitative methods in historical research in the long run. Big data projects have aimed at everything from finding out where to pick fruit in your city to mapping the prevalence of AIDS in the United States, but a recent project, Global Database of Events, Language, and Tone (GDELT) has compiled a massive database of print media coverage in over 100 languages including Armenian, Azerbaijani, and Georgian. Originally created by Kalev Leetaru and Philip Schrodt at Georgetown University, the GDELT database contains about a quarter of a billion uniquely coded units starting from 1979.
06.11.2014 | ხუთშაბათი

The recent history of the South Caucasus as seen by the world’s media - Part 2, Georgia

In Monday's blog post, we looked at a snapshot of Armenia and Azerbaijan’s representation in the global media from 1979 to present. Today, we take a look at the third South Caucasus state, Georgia. What are the events that have popped up in Georgia and made international news over the last 35 years?
04.12.2014 | ხუთშაბათი

SME Performance in Georgia and Armenia: Part 2

As discussed in the first blog post of this series, the results of the CRRC Caucasus Barometer (CB) survey show that Georgians demonstrate higher levels of interpersonal and institutional trust than Armenians. These types of trust are important indicators of social capital, which is often taken as a necessary condition for the presence of a robust, productive entrepreneurial class and small and medium enterprise (SME) sector.
19.10.2015 | ორშაბათი

Do Think Tanks in Georgia Lobby for Foreign Powers?

[Editor's note: This is the fifth in a series of blog posts co-published with On Think Tanks. The views expressed within this blog series are the authors alone and do not represent the views of CRRC-Georgia.]

By Till Bruckner 

If you work on policy issues in a transition or developing country, you probably know the standard line on think tanks by heart. Local think tanks build domestic research capacity, improve policy formulation processes and outcomes, and enrich and enhance democratic debates, thereby contributing to the emergence of more democratic, wealthy, and equitable societies. (Yes, you may copy and paste this into your next fundraising proposal if you wish).
26.10.2015 | ორშაბათი

Common challenges, common solutions

[Editor's note: This is the sixth in a series of blog posts co-published with On Think Tanks. The views expressed within this blog series are the authors alone and do not represent the views of CRRC-Georgia.]

By Dustin Gilbreath 

So far, in this series think tankers working in the South Caucasus have reflected on the issues challenging their countries’ think tank sector. In many ways, some fundamental problems lie at the heart of the specific problems, and I think they can more or less be summed up as problems with language and audience; quality of research; funding; and transparency. This post takes a look at one of these challenges – language and audience – and considers some things that might nudge the region’s think tanks forward.
14.03.2012 | ოთხშაბათი

Georgia and the EU’s Economic Woes

Why hasn’t the economic crisis in Europe deterred Georgia’s desire to join the European Union? The majority of Georgians (and the Georgian government) want to join the EU despite crisis in the Eurozone. Yet, the continued crisis, including the Eurogroup’s recent (and second) rescue of Greece’s economy and Hungary’s harsh austerity measures, illustrates that the crisis is not isolated to the Eurozone.
07.07.2011 | ხუთშაბათი

Carnegie Research Fellowship Program | Winners Announced

Six scholars from the South Caucasus have been selected to join a prestigious program administered by CRRC and the National Council for Eurasian and East European Research (NCEEER). Carnegie Research Fellowship Program (CRFP) offers local scholars in the social sciences non-degree research opportunities at universities and institutes in the United States.
13.07.2012 | პარასკევი

PERCEIVED POVERTY IN GEORGIA: RESULTS OF THE 2011 CAUCASUS BAROMETER

The 2011 Caucasus Barometer asked the Georgian population, “Relative to most of the households around you, would you describe the current economic condition of your household as very good, good, fair, poor or very poor? 
29.09.2011 | ხუთშაბათი

Is the South Caucasus a homogenous region?

In a recent datablog, the Guardian published a map visualizing how the former Soviet countries are doing 20 years after the fall of the Soviet Union. The map compares the 15 former Soviet countries in terms of economic development, demographics and democratic transition. It also divides the countries into five regions: Russia, the Baltic countries, the EU borderlands, Central Asia and the South Caucasus.
14.10.2011 | პარასკევი

Fancy Living Abroad? 39% of Young Armenians Say "Preferably Forever"

Last year, Ani Navasardyan asked, “Why do so many Armenians leave Armenia?” Migration is also an issue in Georgia and Azerbaijan. Data from the CB 2010 reveals that around half of the respondents in Georgia (47%) and Azerbaijan (52%) are interested in temporary migration. Still, Armenia stands out since 64% of the adult population is open to the idea of temporarily leaving the country.
02.11.2011 | ოთხშაბათი

A Further Look at Material Deprivation

Continuing to explore standards of living in the South Caucasus, this blog looks at the between four sources of household income and material deprivation using data from the 2010 Caucasus Barometer. Each of the four sources of income (salaries, pensions or government transfers, sales from agricultural goods, and remittances) are categorized by their importance to the household and then cross tabulated with material deprivation. The findings suggest that families reliant on salaries and remittances are better off, while families receiving pensions and government transfers, or those who sell agricultural products as their primary source of income have higher than average rates of material deprivation. 
07.12.2011 | ოთხშაბათი

Can a Cut NATO Supply Route Through Russia Benefit Georgia and Azerbaijan?

The 20th anniversary of the dissolution of the Soviet Union is upon us, and US-Russian tensions have risen as Russia contemplates terminating the NATO supply route through Russia. International news reports such as The New York Times detail the threat as a “death blow” to the U.S.-led NATO mission in Afghanistan and indicate that this could be a blessing in disguise for NATO hopeful Georgia, as well as for Azerbaijan.
25.05.2012 | პარასკევი

Women in Parliament: How Do Georgia, Armenia and Azerbaijan Compare to Other Countries?

Expanding on the topic of a previous blog, this post compares statistics on the number of women in national parliaments in the South Caucasus and other areas of the world. The countries of the South Caucasus rank low on women’s participation in parliament compared to many other countries.
30.03.2010 | სამშაბათი

2010 Big Mac Index | Increased differences between Baku and Tbilisi

In 2007 we wrote a blog post on the Big Mac Index, an index published by The Economist as an informal way of measuring purchasing power parity (PPP). The idea is that a dollar should buy you the same amount in all countries, and as a Big Mac is assumed to be produced in the same way everywhere it can serve as a point of comparison. You can thus determine how far off the exchange rate is between countries, in terms of citizens’ ability to buy the same “basket” of goods and services (in this case a Big Mac hamburger).
 
22.07.2010 | ხუთშაბათი

Attitudes toward the West | Caucasus Analytical Digest

Following an article on Georgians’ attitudes toward Russia, CRRC Fellows Therese Svensson and Julia Hon have written a new piece for CAD, entitled “Attitudes toward the West in the South Caucasus”. Their article looks at citizens’ views on three areas of relations — political, economic and cultural — between the South Caucasus and the West, in particular NATO, the US and the EU. The data were derived from the South Caucasus–wide 2007 and 2008 Data Initiatives (DI), as well as from the 2009 EU survey that was conducted in Georgia.
05.11.2010 | პარასკევი

Overcoming Negative Stereotypes in the South Caucasus

CRRC hosted a presentation on October 27 by Onnik Krikorian, a British journalist of part-Armenian descent and the Caucasus editor for Global Voices, entitled “Overcoming Negative Stereotypes in the Caucasus: New and Social Media in cross-border communication and conflict reporting.”
10.12.2010 | პარასკევი

Policy Attitudes towards Women in Azerbaijan: Is Equality Part of the Agenda?

By Yuliya Aliyeva Gureyeva, Baku

The paper published in the 21st edition of the Caucasus Analytical Digest presents an account of how two competing policy approaches coexist in the policy attitudes towards women in Azerbaijan. 
27.02.2008 | ოთხშაბათი

Inflation in Armenia? | Lecture by IMF Representative

Readers here may not be aware that actually our Armenian CRRC also runs its own blog, to announce and describe CRRC's events. One of the most recent events was a lecture by the IMF Resident Representative in Armenia, Dr. Nienke Oomes.
22.07.2008 | სამშაბათი

Caucasus Data: Tolerance towards Others

The CRRC Data Initiative (DI) gives people an opportunity to do interesting cross-country comparisons of the South Caucasus (SC) people’s attitude toward their neighbors. This subject is quite sensitive and complex when thinking of the fact that the SC stands out for its sequence of ethnic conflicts.
30.07.2008 | ოთხშაბათი

Cuil for the Caucasus? A quick test!

As many of you may have heard, this week saw the launch of a competitor to Google. Cuil, which apparently is an old Irish word for knowledge, has been set up by several former Googlists and promises a search that's more oriented on content, and says it can do a more comprehensive job in the ever-expanding worldwide web.
12.09.2008 | პარასკევი

Doing business in Azerbaijan: easy in theory

Results of the World Bank’s Doing Business 2009 project, claims to present "objective measures of business regulations and their enforcement across 181 economies and selected cities at the sub-national and regional level", were made public today.
17.09.2008 | ოთხშაბათი

What do Russians think about the situation in Abkhazia and South Ossetia? -- Data Snapshot

How do urban Russians view the conflicts in South Ossetia and Abkhazia? From September, 5th-8th, 2008 the Analytical Center of Yuri Levada conducted a survey in ten big cities of the Russian Federation, interviewing 1000 Russian respondents. We have translated the results into English here, as they are only available in the original Russian on the Levada website.
23.10.2008 | ხუთშაბათი

McCain vs Obama: Caucasus preferences


So here's something that we are a little puzzled about. The Economist is undertaking a poll to see which American Presidential candidate is favored by the world. In a very blue worldwide map, rooting for Obama, two noticeable yellowish spots, Macedonia and Georgia. McCain, of course, is popular in Georgia for having said "Today we all are Georgians" during the recent conflict.
13.11.2008 | ხუთშაბათი

World Economic Forum Gender Gap Index | a few surprises

Indices are engaging and instructive, but some really baffle us. The World Economic Forum (WEF), the organisation that organises the annual high-profile Davos meetings, has come up with a gender index, and the Caucasus is featured. The index is intended to measure how the world is closing the gender gap in education, health, and political and economic participation. In principle, this is a great idea, since there are significant challenges and discrepancies (as our data itself shows).