PROVIDING INTERNATIONAL COMPARABILITY OF POVERTY ASSESSMENTS . EXPERIENCE AND PROBLEMS

PROVIDING INTERNATIONAL COMPARABILITY OF POVERTY ASSESSMENTS. EXPERIENCE AND PROBLEMS

Ms. Elena Frolova, Ms.Tatiana VelikanovaDepartment of Living Standards

and Household Surveys, Federal State Statistics Service (Rosstat),

Russian Federation

Data sources and methods of inequality and poverty assessment in the Russian statisticsIncome distribution indicators have been

compiled in Russia since 1970, and indicators on the poverty level - since 1992.

Until 1992, the basis for these estimates was a special sample survey of income, which was held every five years through 1989 inclusive, covering about 170 thousand families.

28.11.2013 2Department of Living Standards and Household Surveys,

Federal State Statistics Service (Rosstat)

Since 1992 quarterly household budget survey (HBS) data have been used as an information base for calculation of inequality and poverty indicators.

The HBS structure is aimed at obtaining data on household expenditures. Since 1997 it has not contained direct indicators on the total amount of income. Assessment of each surveyed household’s income is made by calculation.



Discrepancy of HBS results with macroeconomic indicator of population monetary income – primary causes:

– Composition of HBS sample frame with underrepresented population cluster with relevantly high income

– Poor reliability by indicators of savings’ increment and high-cost expense items that in many ways determine income spread.



According to the current methodology calculations of indicators of population distribution by income are performed using the method of simulation by converting the empirical distribution (based on HBS data), into the distribution range that corresponds to a grouping variable in the population.



On the basis of population distribution range by per capita income the following data are produced:

Distribution of total volume of monetary income by quantile groups;

Basic coefficients (indices) of income spread; Indicators of absolute poverty in the general population

(for the Russian Federation and its constituents) and by demographic (age and sex) groups of population;

Indicators of relative poverty in the general population; Indicators of absolute poverty in the general population

for international comparisons (poverty line is set at the international level considering purchasing power parity).



Dynamics of the population with income below the subsistence minimum

28.11.2013Department of Living Standards and Household Surveys,

Federal State Statistics Service (Rosstat) 7

In 2000 the methodology of the subsistence minimum calculation was changed.In 2005 the composition of the consumer basket for determination of the minimum subsistence level was changed.

Number of indigent population by constituent entities of the Russian Federation in 2012(percentage of the total number of population in the region; preliminary data)

Брянская область

Воронежская область

Калужская область

Курская область

Московская область

Рязанская область

Тамбовская область

Тульская область

г. Москва

Республика Карелия

Архангельская область

Калининградская область

Мурманская область

Псковская область

Республика Калмыкия

Астраханская область

Ростовская область

Республика Дагестан

Кабардино-Балкарская Республика

Республика Северная Осетия - Ал...

Юж

ный

фед

ерал

ьны

й ок

руг

0 5 10 15 20 25 30 35 40 45

Russian Federa-tion (11,0)

Республика Марий Эл

Республика Татарстан

Чувашская Республика

Кировская область

Оренбургская область

Самарская область

Ульяновская область

Курганская область

Тюменская область

Республика Бурятия

Республика Хакасия

Забайкальский край

Иркутская область

Новосибирская область

Томская область

Республика Саха (Яку...

Приморский край

Амурская область

Сахалинская область

Чукотский авт. округ

Ура

льск

ий ф

едер

альн

ый

окру

гД

альн

евос

точн

ый

фед

ерал

ьны

й ок

руг

0 5 10 15 20 25 30 35 40 45

Russian Federa-tion (11,0)



Share of population with monetary income below the subsistence minimum level by main age groups

2009 2010 2011 20121)

Total number of population 13,0 12,5 12,7 11,0Children under the age of 16 18,6 19,2 19,9 17,9

Children under the age of 7 16,1 17,9 18,7 15,8Children aged 7-16 20,8 20,2 21,1 19,8

Youth aged 16-30 13,5 12,8 12,8 11,0Male aged 16-30 12,7 12,0 12,0 10,4Female aged 16-30 14,2 13,6 13,6 11,7

Persons of capable age above 30 13,1 12,9 13,1 11,2Male aged 31-59 12,1 12,1 12,2 10,5Female aged 31-54 14,2 13,8 14,0 12,1

Population of above capable age - totally 7,5 6,1 6,1 5,2Male in the age of 60 and above 7,2 5,4 5,6 4,7Female in the age of 55 and above 7,6 6,4 6,3 5,4



Percent of total number of population in a corresponding age group

1) preliminary data

Correlation of main resource indicators with absolute and relative poverty boundaries

Absolute poverty boundaries:

― subsistence minimum level

― 50% of median monetary income in 2001

Relative poverty boundaries:

― 40% of median monetary income

― 50% of median monetary income



Dynamics of absolute and relative poverty

28.11.2013

Department of Living Standards and Household Surveys,


Dynamics of absolute and relative poverty

The rate of decline / growth of absolute and relative poverty



Share of population with income below the poverty line set at the international level with the purchasing power parity1)

Share of population with income per capita lower: Reference: share of

population with income lower

than the subsistence minimum

1,25$2) per day

2$2) per day

2,5$2) per day

4$2) per day

10$2) per day

Russian Federation 2009 0,0 0,0 0,1 0,6 8,9 13,02010 0,0 0,0 0,1 0,5 8,4 12,52011 0,0 0,0 0,1 0,5 8,4 12,720123) 0,0 0,0 0,1 0,5 8,0 11,0

Reference4): Brazil

2009 6,1 10,8 15,1 27,6 … 21,4India

2010 32,7 68,8 81,1 93,8 … 29,8China

2009 11,8 27,2 36,5 58,0 … …South Africa

2009 13,8 31,3 39,5 55,5 … 23,05)



1) The World Bank2) Russian Federation – by PPP in international prices 2008 (2011-2012 – preliminary data); Brazil, India, China and South

Africa – by PPP in international prices 20053) Preliminary data4) Source of information: The World Bank database "Poverty and Inequality Database“5) 2006

percentage of total population

Development of methodology in the poverty and inequality statistics

Expansion of the system of estimation indicators of socio-economic differentiation and poverty due to the implementation of indicators of socio-economic differentiation and poverty, standardized by the OECD, in the Russian statistics for comparative analysis at the international level and identification of trends in the dynamics of income distribution and poverty level within the country.



Tasks requiring solutions on the way of transition to the extended system of assessment indicators of differentiation and poverty based on an OECD methodology:• choice of information sources;• identification of indicators and the order of

their calculation (depending on used information base);



• calculation across the various poverty thresholds (to determine the level of relative poverty);

• development of equivalence scales;• improving the quality of initial data;• problem resolution of incorporation a new

system of calculation in the composition of the current complex.



Estimates of relative poverty in Russia according to the OECD methodology

According to the OECD methodology, the relative poverty threshold is 50% of percentage of the median equivalised disposable income of the entire population.Equivalised disposable income is expressed as follows:

N = D/SE, N – per capita equivalised income;D – nominal household income;S – household size;E=0,5 - equivalence elasticity.

28.11.2013 18УпрDepartment of Living Standards and Household Surveys,


Poverty risk index by gender and by age in 2008according to the current methodology equivalence elasticity Ɛ=1 according to the OECD methodology

equivalence elasticity Ɛ=0,5



Children under

the age of 16 years

Men aged 16

- 30 years

Women aged 16

- 30 years

Men aged 31

- 59 years

Women aged 31

- 54 years

Men aged 60 and over

years

Women aged 55 and over

years

001

001 001

001 001 001

001

0 - 17 years

18 - 25 years

26 - 40 years

41 - 50 years

51 - 65 years

66 - 75 years

over 75 years

001

001 001 001 001

002 002

001

001 001 001 001

002 002

001 001 001 001

001

003 003

money incomedisposable income (after taxes)market income (before transfers)

Poverty risk index > 1 shows how many times the poverty risk for the population grouped by age and sex is greater than the poverty risk for the population in whole.Poverty risk index < 1 shows how many times the poverty risk for the population grouped by age and sex is lower than the poverty risk for the population in whole.

Poverty risk index by gender and by age in 2008(according to the OECD methodology)



0 - 17 years

18 - 25 years

26 - 40 years

41 - 50 years

51 - 65 years

66 - 75 years

over 75 years

001

001 001 001 001

001 001

001

001 001 001 001

001 001

001 001 001 001

001

003

003

money incomedisposable income (after taxes)

Men

0 - 17 years

18 - 25 years

26 - 40 years

41 - 50 years

51 - 65 years

66 - 75 years

over 75 years

001

001 001 001 001

002

002

001

001 001 001 001

002 002

001

001 001 001

001

003 003

money incomedisposable income (after taxes)market income (before transfers)

Women

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PROVIDING INTERNATIONAL COMPARABILITY OF POVERTY ASSESSMENTS . EXPERIENCE AND PROBLEMS