A Hypothesis on Poverty Change in Albania (2007-2016)

The aim of this paper is to investigate the poverty changes in Albania using data coming from the Household Budget Surveys conducted in 2007-2016 by the Albanian National Statistics Institute (INSTAT). In particular, we employ both static and dynamic approaches to evaluate the effect of growth and inequality on poverty variation both at national and macro-region level. To better understand the effect of economic growth on poverty change, we also perform two simulations that account for two scenarios of economic growth. The results show that: (i) the increase in poor population is due to the lack of growth in consumption; (ii) the improvement in the distribution of consumption has stopped further increases in poverty level. Finally, the findings of the two economic growth simulations show that an economic growth without an increase in inequality could reduce poverty in all its dimensions.