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Journal section "Regional economics"

Economic Inequality of Citizens beyond Averages: Assessment in the Conditions of its Transformation

Pugachev A.A.

Volume 16, Issue 3, 2023

Pugachev A.A. (2023). Economic inequality of citizens beyond averages: Assessment in the conditions of its transformation. Economic and Social Changes: Facts, Trends, Forecast, 16(3), 141–158. DOI: 10.15838/esc.2023.3.87.7

DOI: 10.15838/esc.2023.3.87.7

Abstract   |   Authors   |   References
Inequality in Russia has been at a consistently high level for 30 years, but it is not permanent or static. New forms of it are emerging, such as digital inequality, inequality of life and work balance, health inequality, inequality of the coronavirus crisis. The difference between the richest and poorest in food consumption in terms of volume is shrinking, but in terms of quality it is growing. The purpose of the study is to substantiate the need to improve approaches to the measurement of economic inequality of citizens on the basis of determining the features of its modern transformation. The hypothesis of the study is that economic inequality in Russia is transforming, and the existing approaches to its assessment do not allow us to comprehensively and objectively determine its current state, which leads to the ineffectiveness of the measures taken by the government to smooth it out. A comparative analysis of the classical indicators of economic inequality was conducted: the Gini coefficient, the Theil, Atkinson, Palma indices, R/P 10% ratio (the ratio of the average income of the richest 10% to the poorest 10%), R/P 20% ratio (the ratio of the average income of the richest 20% to the poorest 20%), decile differentiation ratio (the ratio of the lowest income in the tenth decile to the highest income in the first decile) and quintile differentiation ratio (the ratio of the lowest income in the fifth quintile to the highest income in the first quintile). The results of the assessment of inequality in Russia obtained by eight organizations (Rosstat, CIS Stat, World Bank, Luxembourg Income Study, Credit Suisse, World Inequality Database, UN Development Program, European Bank for Reconstruction and Development) are compared. In Russia, income inequality remains consistently high, wealth inequality is excessive (Credit Suisse estimates the Gini coefficient at 0.88), and opportunity inequality is less significant in comparison to them. It is proved that the classical statistical indicators do not reflect the transformation of economic inequality, new markers are needed for this. Rosstat estimates income inequality and consumption inequality, leaving out wealth inequality and nonmonetary manifestations of economic inequality. Four directions for improving approaches to the diagnostics of economic inequality in Russia were identified: a qualitative assessment of the manifestations of consumption inequality, nonmonetary manifestations of economic inequality, wealth distribution and the increase in income differentiation within the groups of the wealthiest citizens

Keywords

gini coefficient, income inequality, smoothing, Gini coefficient, wealth inequality, consumption inequality, opportunity inequality, transformation of inequality, Rosstat, inequality assessment

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