Crying Wolf: Rectifying Poverty Rates in Kosova

Abstract

Kosova is one of the most impoverished areas in Europe. The approach, however, for calculating poverty rates adopted, in all good faith, by the international community, has resulted in unrealistically high overall poverty rates and questionable relative rates between ethnic groups, urban and rural areas, and among Kosova’s regions. Two reasons are proposed for this: questionnaire designs which encourage refusals or response bias and inappropriate measures of adult equivalencies. Employing data from a 1,000 observation household survey, the implications of alternative approaches for estimating poverty rates are explored. The results suggest that current poverty rate estimates are two to three times the actual rates. Moreover, these estimates overstate differences between segments of Kosova’s society. Of particular concern, current estimates exaggerate differences in poverty rates between ethnic Serbians and ethnic Albanians, thereby exacerbating tensions.