sewing machine, a video recorder, and a radio; the average quantities of these goods clearly declined during the period of the analysis; (iii) “standard” goods whose quantities do not indicate significant changes over time, such as a gas stove, a refrigerator,<sup>8</sup> and a stereo system.<sup>9</sup> To further analyze the changes in welfare (measured by durable goods) over time and to see how the rich fared against the middle class and the poor in the process of accumulating durable goods, this paper focuses mostly on the “modernization” goods. Obviously, all types of households (rich and poor) are likely to acquire these goods over time. However, they will do so not necessarily at the same pace – for example, rich households may accumulate assets at a faster rate than poor households.<sup>10</sup> Among the “modernization” goods for the purpose of our analysis we pick a few that are generally widespread among the population. Durable goods, which are less widely used among the population, such as dishwashers<sup>11</sup> are not the subject of further investigation. As a result, four durable goods -an automatic washing machine, a color TV, a personal computer<sup>12</sup> and a car - are selected for further analysis of the ownership trends over time and across socioeconomic groups.

The main purpose of our analysis is to investigate how various “slices” of the population, or population groups, fared in the accumulation of durable goods over time. To do that, we define 5 wealth groups of population based on the distribution of household consumption per capita: (1) poorest (bottom 20 percent of the distribution); (2) lower middle (21 to 40 percent of the distribution); (3) middle (41 to 60 percent of the distribution); (4) upper middle (61 to 80 percent of the distribution); (5) richest (top 20 percent of the distribution).<sup>13</sup>

> 8The quantity of refrigerators seem to slightly decline over time (as the quantity of freezers clearly increased), however, the average quantity of refrigerators per household (0.93) in 2003 is only marginally lower than that (0.95) in 1995 .

> 9 This classification of goods does not assume any value judgment, but is rather based on the observed trends in quantity over time.

> 10 One could also expect that richer households would get rid of the “obsolete” goods at a faster rate. We do not investigate this issue in the paper.

> 11 By 2003 there were only 1.5 dishwashers on average, per 100 households.

> 12 Only a very few households had personal computers as of 1995. Nevertheless, since then there was a substantial increase in the possession of this item and by 2003 there were 10 computers on average per 100 households.

> 13 The consumption aggregate for Bulgaria was calculated in all survey years (1995, 1997, 2001 and 2003) and does not include the user value of durables. While the real value of consumption aggregate is not comparable over time, we, however, anticipate that the rankings of households are comparable over time given the composition of the consumption aggregate. This assumption is supported by the existent evidence from Bulgaria household surveys (see, for example, Carlo Del Ninno, 1996; Tesliuc, 2004),

- 6 -