Oil-led Economic Growth and the Distribution of Real Household Incomes and Consumption in Azerbaijan

While the oil-led economic growth in Azerbaijan 2004-2009 can be described as pro-poor, both in terms of real incomes and real consumption, actual standard of living have not changed significantly.  CASE Fellows Alexander Chubrik and Mateusz Walewski have found that throughout the period household incomes were tightly correlated with oil GDP than with non-oil growth, employment was the most important source of income growth, and poorer households changed their coping strategies from subsistence agriculture to paid- and self employment. Although these changes led to a dynamic increase in incomes, it hardly changed the consumption basket, with food still constituting more than 65% of spending. Lastly, low effectiveness of social transfers and their even distribution among income deciles have played a negligible role in the income growth of the poorest households.

CASE Network Studies and Analyses 417 Oil-led Economic Growth and the Distribution of Real Household Incomes and Consumption in Azerbaijan by CASE Fellows Alexander Chubrik and Mateusz Walewski is based upon the two year CASE project, Implementation of Advisory Services on Macroeconomic Management and Institutional Reforms in the Ministry of Economic Development (MoED) of Azerbaijan.