An Evaluation of the Importance of Subsistence Food Production For Assessments of Poverty and Policy Targeting

A representative survey of Romanian households highlights the importance of subsistence food production to consumer welfare. Estimates of the incidence of poverty are sensitive to the valuation of subsistence production, particularly for certain sub-groups. The characteristics of those engaged in subsistence food production are profiled and sub-groups identified using a combination of factor and cluster analysis. The factor analysis identifies three dimensions of indicators to characterise households (rurality, financial resources and time dedicated to main activity). Based on these factors, four clusters of Romanian households are identified. The two poorest groups are the most rural and dependent on subsistence production, and the assessment of the latter’s value is most important to these groups in terms the numbers classified as poor. Poverty alleviation strategies for each sub-group are discussed.