Living Standards during Transition to a Market Economy: The Kyrgyz Republic in 1993 and 1996

Abstract

Household survey data from the Kyrgyz Republic are used to analyze changes in the determinants of household expenditure during the transition from central planning. Quantile regression is applied to a human capital model with consumption related to the household head's education and is controlled for demographic and locational variables. Education, region, ethnicity, and family size are all significant determinants of expenditure, but the model's explanatory power is stronger in 1996 than at the start of the transition in 1993. The costs of dependents became larger; an extra child was a greater economic burden than an extra pensioner, especially in poorer households. The education results are more difficult to interpret; the estimated returns declined between 1993 and 1996, but better educated heads appear to have moved their households up in terms of the income distribution.J. Comp. Econom., September 2000, 28(3), pp. 502–523. Vanderbilt University, Nashville, Tennessee 37235; University of Adelaide, Adelaide, South Australia 5005, Australia.