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Inequality in Russia: Regions, Cost of Living and Equivalent Income
[Неравенство В России: Регионы, Стоимость Жизни И Эквивалентный Доход]

Author

Listed:
  • Alexander Surinov

    (National Research University Higher School of Economics)

  • Artur Luppov

    (National Research University Higher School of Economics)

Abstract

The main task of the paper is to assess income inequality in the light of regional differences in the incomes’ purchasing power and their potential to provide for the needs of individuals in households of varying size and composition. The accuracy of inequality measurements is critical to sound social policymaking on curbing inequality as a hindrance to social progress. The inequality indicators,adjusted to reflect regional variation in the cost of living and in the household size and composition, have allowed us to assess public living standards based on the actual purchasing power of household incomes and their sufficiency to meet the needs of individual household members. We have applied the regional purchasing power parities of the Russian ruble and a modified OECD equivalence scale to adjust the nominal income. The calculations drew on the microdata of a sample survey of household incomes and social program participation. By matching the distribution parameters for adjusted and nominal income values, the authors have built a framework for assessing the impact of regional variations in cost of living and household size as factors in income inequality. The paper presents the results of pilot estimates of the impact on income distribution, adjusted to take into account the regional cost of living variations and the equivalence scales. The authors have demonstrated a viable method of measuring the impact of the aforesaid factors on the drift of income strata across the country, and shown the dependence of national inequality indicators on territorial disparities in consumer price levels and demographic profiles of regional societies

Suggested Citation

  • Alexander Surinov & Artur Luppov, 2021. "Inequality in Russia: Regions, Cost of Living and Equivalent Income [Неравенство В России: Регионы, Стоимость Жизни И Эквивалентный Доход]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 3, pages 82-111, June.
    • Handle: RePEc:rnp:ecopol:s2116
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    References listed on IDEAS

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    1. Gianni Betti, 2014. "The effect of equivalence scales on poverty at Oblast level in Ukraine," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(2), pages 78-88.
    2. Aleksandr Surinov & Artur Luppov, 2020. "Income Inequality in Russia. Measurement Based on Equivalent Income," HSE Economic Journal, National Research University Higher School of Economics, vol. 24(4), pages 539-571.
    3. Fabrizio Balli & Silvia Tiezzi, 2010. "Equivalence scales, the cost of children and household consumption patterns in Italy," Review of Economics of the Household, Springer, vol. 8(4), pages 527-549, December.
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