Regional poverty in Croatia, 2002-2004

This paper investigates the regional variation in poverty measures in Croatia on the basis of the Household Budget Surveys 2002-2004. An absolute poverty line is estimated at the national level following the method introduced by Ravallion (1994). After defining five geographical regions, we estimate the class of Foster-Greere- Thorbecke (1984) poverty measures for each region, separately by urban and rural areas. Regional variation in poverty rates turns out to be substantial. The risk of poverty in rural areas is almost three times higher than in urban areas. Microsimulations based on multivariate regression analysis show that regional disparities in poverty rates persist even after controlling for differences in education, labor market and other demographic factors.