Self-evaluation of the financial position of households

11.06.2007

The 2006 was characteristic with dynamic increase of population money income. What influence it had left on the subjective self- appraisal of the households in comparison with previous years?

Central Statistical Board has summarized the preliminary data of survey on household budgets on self-appraisal of material situation of households. In comparison with the self-appraisal of material situation of households of the previous year, should be mentioned increase of rate of those households, which gave appraisal “we are not rich, but we live good”, rate of those within a year increased by 3.4 percentage points. But the share of those households, which apprise their material situation as “we are not poor, but we live on the edge of poverty” – decreased by 5.2 percentage points, of those, who apprised themselves as “we are poor”- by 1.3 percentage points. It shows that the objective changes in the level of material situation occurred also in the relatively subjective appraisals.

The data on household budget survey show, that the dominating self-appraisal of the households is ‘’we are neither rich, nor poor’’. In such opinion in 2006 were 62% of the Latvia households, what is slightly less than in 2005 (59.1%).Unchanged and very small (0.1%) is the weight of households that consider themselves as rich.

If the household’s self-appraisal of material situation is - “’we are neither rich, nor poor”, it does not mean that the household is in average level or is average wealthy. Often such appraisal is given by households, which are bounded to accept the material situation, which is neither good, nor is considered to be on the edge of the poverty. Therefore, the belonging of households to one or another stratum should be judged by objective indices, as income, consumption expenditures, etc.

Self-appraisal of material situation of households
(in per cent)

Total

We think that we are amongst the rich in Latvia

We are not rich, but we live good

We are neither rich nor poor

We are not poor, but we live on the edge of poverty

We are poor

2002.g.

100

0.1

7.7

53.1

30.1

9.0

2003.g.

100

0.1

8.4

53.5

30.5

7.5

2004.g.

100

0.1

9.3

56.6

27.2

6.7

2005.g.

100

0.1

9.0

59.1

26.2

5.6

2006.g.

100

0.1

12.4

62.2

21.0

4.3

Comparing the results with the inquiry results in the preceding years, a positive evaluation trend may be observed – gradually increases the number of those respondents, which think that they are not rich, but live good. In the same time, the weight of those respondents decreases who consider themselves on the edge of poverty, or as poor. Also in rural areas, comparing results of 2006 (11%) with indicators of 200 (7.8%), the weight of households, which consider themselves as not rich, but living well, has slightly increased.

Self-appraisal of material situation of households in regions 1
(in per cent)


The self-appraisal of material situation is different in different regions of Latvia. The largest weight of households providing the response “we are not rich, but we live good” is in Kurzeme (18%) and Riga (15%). While the responses “we are on the edge of poverty or we are poor” are mostly expressed in Latgale (35%). Nevertheless, in comparison with the previous year, the self-appraisal of households residing in Latgale has improved.
__________
1 Six statistical regions

Self-appraisal of material situation of households by social and economical groups
(in per cent)


Their material situation is being evaluated as better by the households of entrepreneurs, self-employed persons, and paid employees, while as more critical by households without permanent means of subsistence, as well as households of pensioners.

When analysing the self-appraisal of households in groups of quintiles 2), it can be said that the self-appraisal corresponds generally to the objective quintile evaluation, accordingly, the households of lower quintiles estimate their material situation as worse than households the income of which corresponds to the level of higher (more prosperous) quintiles. Respectively - 32% and 34% of households of quintiles 1 and 2 recognize themselves as not poor, but being on the threshold of poverty, but 10% and 7% recognize themselves as poor. At the same time, over a half (52% and 54%) of households belonging to these quintiles, that should be objectively recognized as poor, did not want to identify themselves as such and insisted that they are neither rich nor poor.

Within the framework of household budget survey, the respondents were asked to answer the following question: “What is the least amount per month for your household in order for you to not feel poor (could “make the ends meet”)? Answering to this question, the households generally admit that in average Ls 192 per one household member per month would be necessary. Households of cities would need Ls 212 (the households of Riga even more- Ls 229), while rural households would manage with Ls 150 per month per one household member. It must be added that the average value of full subsistence minimum basket of goods and services in 2006 was Ls116.92 per month.

hat is the least amount per month for your household in order for you to not feel poor
(could “make the ends meet”)?
(in average per one household member per month, Ls)


When inquiring households on their economical situation, how has it changed during the previous year, 22% of households recognize that it has become better. 45% of households estimate their economical situation as having remained unchanged, while 33% regard their economical situation as having become worse.

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2 Quintile – one fifth of surveyed households grouped in ascending order by available income per one household member

Prepared by Household Budget Statistics Section
Phone 7366998
Lidija Sparite