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CRRC: INSIGHT TO GEORGIAN HOUSEHOLDS
CRRC Data on Economic Wellbeing in the Caucasus
How are Georgians doing financially, how much do they earn and what do they spend on? CRRC’s Data Initiative allows for an in-depth analysis of these and similar issues on the economic status of the population across the South Caucasus. In the July-August issue of the Magazine, CRRC gave a general overview of the situation in the region, concentrating on the business environment, social networks and political engagement. This article will focus on the economic and financial status of Georgia’s citizens based on data from December 2008. Newer data is currently being processed and will be made available to members of AmCham soon.
Where Georgians Stand Financially
Where do Georgians stand financially? Few Georgians view their financial situation in a positive light. On a ten-step ladder reflecting the economic standing of all the households in Georgia, where the first rung corresponds to the lowest possible economic position in society, and the 10th rung to the highest, the majority of the respondents placed themselves on the lower rungs, with 60 percent located between rungs three and five. None of the respondents see themselves on the highest (9 & 10) rungs and only 1 percent identified themselves on the eighth rung. Curiously, this suggests that Georgians underestimate how well they are doing vis-à-vis the rest of society. Many think that economically they are lower middle-class when in fact they are doing much better, in comparative terms.
The picture does not change when asking respondents to place themselves in five categories ranging from “very good” to “very poor” to identify their economic condition relative to other households: 54 percent identify their economic status as “fair,” 22 percent as “poor” and 7 percent as “very poor.” Again, no respondents mentioned the top category, with only 5 percent saying “good.”
While these are subjective estimates, durable goods owned by the respondents can serve as a reliable indicator of how well the household is doing. In Georgia, only 27 percent of the households have washing machines (mostly concentrated in urban areas), and 21 percent have cars. Surprisingly for the Caucasus, where TV is overwhelmingly popular (80 percent of Georgians watch TV in their free time, with 66 percent spending more than two hours a day watching TV), only 73 percent own a color TV. Cell phone ownership is quite high in Georgia with 84 percent of the households having at least one cell phone. (The data on cell phone ownership is from the CRRC Media Research survey conducted in October, 2009. Note, that the survey sample excluded minority regions in Georgia, where the cell phone ownership is relatively lower. The numbers for the ownership of other household durable goods have not significantly changed over the last year, thus 2008 data is used to allow cross-country comparison.)
How Much Georgians Earn and Spend
The financial situation of the Georgian population does not seem to have significantly changed between 2007 and 2008: in 2008 around 40 percent reported that their income is about the same as in 2007. While 14 percent of the population said they had a higher income in 2008 than in 2007, the same number (14 percent) also said that income is lower. Azerbaijan is doing the best in the South Caucasus, with 33 percent of the respondents saying their income has increased since 2007, and only 11 percent saying it has decreased. Data from 2009 should provide a comparison that will highlight how the financial crisis has affected the three countries.
Asking directly after monetary income is always sensitive and somewhat unreliable (since respondents may be uncomfortable telling the truth), but it corroborates the general trend from other questions. The majority of the population in Georgia says they live on the margins of the poverty line: 38 percent of the individual respondents earn between 51 and 250 USD per month, while around a quarter of the population claims to have no monthly personal income. These will mostly be rural households, with seasonal incomes. One percent says they earn more than 1200 USD per month (the maximum amount of income mentioned), and only 6 percent of the population was able to live comfortably and save a bit for the future.
Unsurprisingly, the majority of the population either spends their whole income on food and utilities, or has to borrow for food quite regularly: in 2008, half of the respondents had to borrow money for food at some point during the six-month period prior to the survey, out of which 17 percent had to borrow for food every month.
Borrowing and Loans
Loans are one of the main sources of monetary income for Georgians. In the twelve-month period of November 2007-08, 23 percent of the respondents in Georgia had taken out a loan or had a debt or credit of more than 100 USD. Of those, half had taken their largest loan from the bank or another credit organization with interest. Loans without interest received from private individuals are the second most popular source of the loans in Georgia and in Armenia. The situation is different in Azerbaijan, where 58 percent prefer to take out loans without interest from private individuals against 27 percent that take out loans with interest from banks and other credit agencies.
In 2008, the most popular reason for taking out loans in Georgia was to purchase durable goods (19 percent of the loan-takers). In Armenia, business expenses and investments score the highest – 17 percent, and 16 percent of the Azerbaijani loan-takers use the loans to cover every day expenses.
In all three countries, one of the main reasons for taking out the loan was for medical care (12 percent in Georgia, 16 percent in Armenia and 14 percent in Azerbaijan). This number is unsurprising given that of those Georgians who said that they had not taken health care when sick, 75 percent cited not having money to pay as the main reason for not seeking medical help (Georgia is followed by Armenia – 65 percent; and Azerbaijan – 54 percent).
Optimistic about the Future
Despite of these constraints, Georgians adopt an optimistic attitude toward the future. Georgians say their household needs on average 700 USD a month to live normally, which is arguably a modest amount in comparison to many countries (CRRC left the interpretation of a “normal life” up to the respondents). Many of the respondents also have positive expectations from the future: a large segment of the population thinks they will climb the economic ladder in the next five years. As the data shows, the overwhelming majority (84 percent) of the population has people to rely on when they have problems. Additionally, in the latest (October 2009) survey conducted by CRRC, 68 percent of Georgians consider it to be “very important” for a good citizen to support people who are worse off than themselves, indicating that strong social networks are a key factor in this optimistic outlook.
Much of our data is publicly available at http://www.crrccenters.org/– and we offer trainings on how to analyze data. Data from 2009 will be available in the next few weeks.
Nana Papiashvili and Arpine Porsughyan are Research Associates at the Caucasus Research Resource Centers (CRRC), regional office. CRRC is a joint program of the Eurasia Partnership Foundation, USAID, and the Carnegie Corporation of New York, and has worked with many major international organizations on various research projects, ranging from surveys and focus groups to complex mapping projects. CRRC data is regularly presented to members of AmCham at luncheons and other events.
SDA – A Useful Tool for Those Who Want to Access Data Online
CRRC has launched Survey Documentation and Analysis (SDA), a web-based interface for statistical analysis. SDA was designed by the Association for Computer Assisted Survey at the University of California Berkeley. Even those who do not have advanced data analysis skills will be able to extract data and get output in a nice table and a chart without downloading any special software or a dataset. CRRC is in the process of loading all of its datasets onto the SDA platform. Come visit the website at www.crrccenters.org/sda. We would love to hear your feedback and make changes accordingly.
Arpine PORSUGHYAN and Nana PAPIASHVILI
“The Caucasus Research Resource Centers” (CRRC), Tbilisi, February 24, 2010
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