Inequality in Russia: Regions, Cost of Living and Equivalent Income

Неравенство в России: регионы, стоимость жизни и эквивалентный доход

Alexander Surinov () and Artur Luppov ()
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Alexander Surinov: National Research University Higher School of Economics
Artur Luppov: National Research University Higher School of Economics
Authors registered in the RePEc Author Service: Суринов Александр Евгеньевич

Ekonomicheskaya Politika / Economic Policy, 2021, vol. 3, 82-111

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

Keywords: : household income survey; income inequality; purchasing power; cost of living; equivalence scale; microdata (search for similar items in EconPapers)
Date: 2021
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