Living Standards Measurement Survey (LSMS)

The development of the Poverty Reduction Strategy 2002-2003 would not have been possible without the key and timely data which represented the basis thereof. The process of collection of poverty-related statistical data began with two annual Living Standard Measurement Surveys (LSMS) conducted in 2002 and 2003 at the request of the Government of the Republic of Serbia and with the expert assistance of the World Bank.
In order to ensure comparability of data over a five-year period (2002-2007) and get a clear insight into trends related to the level of poverty in Serbia, the Republic Statistics Office conducted a Living Standards Measurement Survey in 2007. The data obtained are comparable to the data sets obtained in the same survey in 2002 and 2003. The comparability of data opened a way to additional policy impact analyses provided for in the Poverty Reduction Strategy that the Parliament, the Government, local self-governments, international donors and civil society organisations implemented throughout the above-mentioned five-year period.
Continuous monitoring of poverty indicators and the developed statistical system for poverty measurement represented the basic preconditions for developing efficient and effective strategic measures. The results of LSMS were published and officially presented in public in May 2008. The data are also available at the internet presentation of the Republic Statistics Office. The survey itself is not a part of regular RSO surveys, so a new LSMS is not to be expected.

Household Budget Survey (HBS)

By virtue of a strategic decision taken in 2004, poverty statistics in Serbia are based on data obtained in regular Household Budget Surveys (HBS) until the adoption and realization of EU instrument for poverty measurement i.e. the Survey on Income and Living Standards (SILC). This ensured long-term continuity in monitoring poverty-related data. The Household Budget Survey is regularly conducted by the Republic Statistics Office. There are significant methodological differences between the Living Standards Measurement Survey and the Household Budget Survey making comparisons of results obtained in each of them impossible.

Methodolical differences between HBS and LSMS

1. The first set of differences stems from the differences in periods for which data on consumption are collected. The Household Budget Survey (HBS) data are collected throughout the year. On the other hand, the data for the Living Standards Measurement Survey (LSMS) were collected in the course of one month only (June).

Although the basis for both surveys is the log wherein expenditures for food are recorded, it must be noted that the data in the log in HBS are recorded 15-16 days, while the data for the log in LSMS are recorded throughout a seven-day period.

In the Household Budget Survey (HBS) – a households enters all its purchases on a daily basis but we have no way of knowing what of the items purchased it consumed actually. In the Living Standards Measurement Survey (LSMS), households record – not what they have bought – but what they have consumed on a daily basis (during the period of seven days).

As opposed to the Household Budget Survey, the Living Standards Measurement Survey offers detailed information on use of health care services, social programmes, educational services, work status.

As opposed to the Living Standards Measurement Survey, the Household Budget Survey does not provide sufficient data to assess the value of imputed rent for owners of apartments /houses, nor for the assessment of use of durable consumer goods. Consequently, these two categories of expenditures have been excluded from the analysis.

In view of improvement of the data collection process during the implementation of the Household Budget Survey in the period 2004 – 2005,  poverty trends 2004-2006 cannot be calculated on the basis of this survey. However, continuous monitoring of trends since 2006 has been ensured as a result of the Household Budget Survey.

Statistics on Income and Living Conditions (SILC)

European Council defined, in December 2001, Laeken indicators as an instrument of standardization of social inclusion measurement in the EU Member States. Laeken indicators represent a framework for measurement of multi-dimensional status of social inclusion in EU countries, as well as the basis for comparisons of the situation between the EU Member States.

Eurostat methodology is used for calculating these indicators, and the concept applied is one of the objective relative poverty. The measurement concept is deemed objective because it relies on current income representing a measure of classification of household members to poor and those who are not poor. Furthermore, the concept is relative, because the at-risk-of-poverty threshhold is established on the basis of distribution and variation of income in a country (relative poverty line set as 60% median average consumption per consumption unit) i.e. it depends on the general level of social and economic development which varies considerably from one country to the other. The advantage of a relative concept of poverty as compared to the absolute one, is that it does not call for setting minimum acceptable living standards.

Serbia, as a state not yet member of EU, is not required to conduct the SILC survey regularly. Nevertheless, all efforts are made for the SILC survey to be conducted in the coming period, as basis of objective recording of the initial situation of social exclusion in the country. The implementation of SILC will enable development of new policies related to data and better targeting of the measures of the Government for support to the most vulnerable population.

Conduct of SILC will facilitate Serbia’s reporting on implementation of social inclusion and poverty reduction policies and at the same time provide for comparability of socio-economic parametres in Serbia with that in the EU Member States as well as easier alignment of measures of certain EU members aimed at advancing the level of social inclusion with the measures of social inclusion in Serbia.

The introduction of systemic monitoring of the level of social exclusion and poverty will also provide a basis for develoment of the document: Joint Inclusion Memorandum (JIM). The JIM is to assist candidate countries in combating poverty and social exclusion and modernizing their social policy systems, as well as to help them prepare for full participation in EU policies. The EU candidate countries are invited to develop their JIMs in cooperation with the European Commission.

What is the role of the Social Inclusion Memorandum?

• To prepare the candidate countries for their full participation in the Open Coordination Method on issues of social inclusion, following their accession into the European Union;
• To identify key challenges related to fight against poverty and social inclusion;
• To represent the main strategic measures undertaken so as to start translating the joint EU objectives into national policies; and
• To identify key strategic problems requiring monitoring and additional discussions.