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TERRA ECONOMICUS

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  • 2017
  • No 4
  • Interrelation of types of inequality with indicators of standard of living and welfare of the population in Russian regions

INTERRELATION OF TYPES OF INEQUALITY WITH INDICATORS OF STANDARD OF LIVING AND WELFARE OF THE POPULATION IN RUSSIAN REGIONS

TERRA ECONOMICUS, , Vol. 15 (no. 4),

The purpose of this study is to model the multifactorial dependencies between normal and excessive inequality and real income per capita, as well as establishing interrelationships between the types of inequality and the indicators of human capital quality, living standards and welfare of population in the regions of the Russian Federation. The methodology of the study. The double deflation method based on the indicator of relative cost of living in regions was used for determination of real incomes. The inequality level was assessed by use of the Gini coefficient. The division of inequality into normal and excessive types was carried out by means of the A. Yu. Shevjakov method applying three functional thresholds (poverty, social minimum and social prosperity). The OLS method was used for econometric estimation of the relationships between the types of inequality and the economic development indicators. The correlation of the inequality types with the indicators of quality of human capital, living standards and welfare of the population was determined based on the Pearson coefficient. The results of the study. We developed the multifactor econometric models estimating interrelationships of normal and excessive inequalities with a number of variables, including real income per capita. The S. Kuznets’s dependence was confirmed for the normal inequality of levels I and II. We found that the normal inequality of level III is positively related to real income per capita, while excessive inequality of all levels is negatively connected with it. We revealed that in regions with a higher level of normal inequality and a lower level of excessive inequality there are on average better the following indicators: 1) the quality of human capital (the state of health and education); 2) the standard of living (some indicators of population dynamics, the structure of consumer spending, the state of the legal environment, culture, recreation and tourism); 3) the welfare of the population (housing, durable goods, pure real savings and free time). Application of the results. The results obtained are applicable in managing the socio-economic processes at the regional and federal levels.


Keywords: regions of Russia; normal and excessive inequality; econometric modeling; interrelation; quality of human capital; standard of living; welfare of population

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Founder: Southern Federal University
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