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SA
NATIONAL STATISTICAL SERVICE OF
THE REPUBLIC OF ARMENIA
Gagik Gevorgyan
Member of State Council on Statistics of the Republic of Armenia
Lilit Petrosyan
Member of State Council on Statistics of the Republic of Armenia
Geneva, 2-4 December, 2013

First conducted in Armenia in 1996 (in a one-month period).

It has been conducted every year since 2001

The survey is carried out during the year with monthly changes
(rotation) of households and communities.

Starting from January 1, 2007 to January 20, 2012 the ILCS has
been co-funded by the RA State Budget and the US
Government’s Millennium Challenge Corporation (MCC)
funded Millennium Challenge Account-Armenia Program
(MCA-Armenia).

The sample size of the ILCS has been expanded from 5184 in
2006 to 7,872 households annually.

Poverty is evaluated by means of material (monetary)
indicators. In that context, according to the World Bank
definition, “poverty is the inability to ensure an
acceptable minimum of certain living standards.”

In order to asses the level of well-being in Armenia
consumption aggregate is used.
◦ Consumption aggregate includes the following components:
 (a) cost of consumed food and non-food goods, including own
production, aid from charitable organizations and other sources,
and
 (b) estimated cost of durable goods.

Food consumption includes food consumed at home
and outside the home and in-kind food consumption
such as own food home production, food gifts and
transfers in-kind, and humanitarian food aid.

Non-food consumption comprises the following
categories:
◦
◦
◦
◦
◦
◦
◦
◦
◦
alcoholic beverages and tobacco,
clothing and footwear,
household goods,
transportation,
utilities,
recreation,
education,
health.
in-kind non-food consumption, such as
 non-food goods and
 services received free of
◦ the estimates of the rental value of durables.

In order to assess poverty level in Armenia, concept of
absolute poverty was used.
According to living standards, population of Armenia is
divided into poor and non-poor. Poor include two groups: very
poor and extremely poor.

The poor are defined as those with consumption per
adult equivalent below the upper general poverty line;
◦ The very poor are defined as those with consumption per
adult equivalent below the lower general poverty line,
◦ The extremely poor or the undernourished are defined as
those with consumption per adult equivalent below the food
poverty line.

The poverty line is defined as the monetary value of
the minimum consumer basket, which represents the
amount of goods and services that meet the needs of
the minimum level of living standards formed
(actually expressed) in society.

This is the factually formed minimum consumption
standard the value of which varies according to
changes in consumer prices.

The Minimum Consumer Basket consists of 2
components:
◦ a Minimum Food Basket, corresponding to the allowance
for basic foods, and
◦ an allowance for basic non-food goods and services.

Therefore, a poverty line consists of 2 components:
◦ Food poverty line (estimated monetary value of Minimum
food basket).
◦ Estimated Cost of non food goods and services.

To estimate the food poverty line, NSS uses the World Bank’s
methodology based on the “Cost of basic needs” approach.

The average caloric requirement for Armenia was calculated by
NSS with the technical assistance of the World Bank in 2004 using
information on caloric requirements of different demographic
groups according to the World Health Organization (1985) standards
and information on population shares of these demographic groups.

In that way, the average caloric requirement for Armenia was
estimated at 2,232 calories per day per capita.

Based on the consumption shares of the selected reference
population, 2,232 calories per day is then allocated across
the “most important” food items.

This minimum calorie diet is then has been priced by 2009
average annual national prices using the price-per-calorie
(Pf/cf) for each food item.

So, the monetary value of the minimum food basket is the
Food Poverty Line.

The Armenia ILCS collects information about the
prices of 208 most important food items and non
alcoholic beverages.
Oils and fats, 8.1
Food products,
n.e.c, 1.1
Fish, 0.5
Vegetables,
17.4
Fruit, 4.3
Milk, cheese
and eggs,
18.5
Meat , 10.2
Non-alcoholic
drinks, 0.4
Coffee, tea and
Sugar, jam, 3.8
cocoa, 3.3
Bread and
cereals, 32.4

The Consumption Basket Method, which calculates the
food share in total consumption of those households
whose total consumption, is around to the food poverty
line, estimates the food share closer to 70 percent.

Adding the respective non food allowance we come up
with Lower Poverty line.
Non food and
services, 30.7
Food and nonalcoholic
beverages, 69.3

Meanwhile the Food Expenditures Method, which
calculates the food share in total consumption of those
households, whose food consumption value is around
the food poverty line, estimates the food share closer to
56.5 percent.
Non food and
services, 43.5
Food and nonalcoholic
beverages, 56.5
Poverty lines
In AMD
In USD
Food or extreme poverty line
21 306
57.2
Lower general poverty line
29 856
80.2
Upper general poverty line
36 158
97.1
40
35.2
35
34.5
30
27.6
27.5
27.6
27.5
25
20.1
21.3
19.9
20
15
0
14.5
17.5
13
12.6
11.9
8.1
10
5
35
4.6
1.9
1.6
1.1 1.2
Extremely
poor
Very poor
Poor
2.7 3.7
2.2
Extremely
poor
2008
Urban areas
Very poor
2011
Yerevan
Rural areas
Total
Poor
10
7.9
8
6
5.1
4
2.4
2
1.4
0
Poverty gap
Poverty severity
2008
2011
40
34.5 35.5
35
30
27.3 27.8
25
20
15
10
5
3.7 3.7
1.7 1.6
0
Extremely poor
Poor
Extremely poor
2008
Poor
2011
Female
Male
55.8
60
50
38.2
40
30
17.2
20
10
0
9.2
0.9
2.4
1.2
Extremely poor
Poor
Extremely poor
2008
1
10.7
2
2011
3
4
5
6
7 and more
Poor
50
46
45
42.1
40.1
40
38.6
36.1
35
30.8
30.2
30
25
21.9
19.4
20
14.7
15
10
5
4.2 3.2
7.3 6.3
1.7
3.8 3.2
1
0
0.4
Extremely poor
Poor
1.3
Extremely poor
2008
Poor
2011
Elementary and primary
Upper secondary
Tertiary
Lower secondary
Specialized secondary
50
46.6
45
40.6
40
35
34.6
32.5
32.8
30.4
30
26
25
24.9
20
15
10
5
0
7.4
5.7
2.8
4
0.7
1.1
Extremely poor
Poor
2008
No employed members
2 employed members
2.7
2.3
Extremely poor
Poor
2011
1 employed member
3 and more employed members

The poverty assessment methodology updated in 2009
and implemented with the assistance of the World Bank
experts the new minimum food basket has been
introduced, which reflects changes in the consumption
structure since 2004-2008, as well as the current shares
of food and non-food products and services.

The ILCS 2009 data have been used for designing the
new consumption model. The newly defined minimum
food basket has been used for estimating the extreme
(food) and total (lower and upper) poverty lines (as a
transition from two to three-tier assessment of poverty).