PROVIDING INTERNATIONAL COMPARABILITY OF POVERTY ASSESSMENTS . EXPERIENCE AND PROBLEMS

1. PROVIDINGINTERNATIONAL COMPARABILITYOF POVERTY ASSESSMENTS. EXPERIENCE AND PROBLEMS Ms. Elena Frolova, Ms.TatianaVelikanovaDepartment of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat), Russian Federation

2. Data sources and methods of inequality and poverty assessment in the Russian statistics • Income 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. Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

3. 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 ithas not contained direct indicators on the total amount of income. Assessment of each surveyed household’s income is made ​​by calculation. Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

4. Discrepancy ofHBS results with macroeconomic indicator of population monetary income – primary causes: • Composition of HBS sample framewith 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. Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

5. 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. Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

6. 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). Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

7. Dynamics of the population with income below the subsistence minimum 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. Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

8. Number ofindigent populationby constituent entities of the Russian Federationin 2012(percentage of the total number of population in the region; preliminary data) Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

9. Share of population with monetary incomebelow the subsistence minimum levelby main age groups Percent oftotal number of population in a corresponding age group 1)preliminary data Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

10. Correlation of mainresource indicators with absolute and relative poverty boundaries Absolute poverty boundaries: subsistence minimum level 50% of median monetary incomein 2001 Relative poverty boundaries: 40% of median monetary income 50% of median monetary income Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

11. Dynamics of absolute and relative poverty Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

12. Dynamics of absolute and relative poverty

13. The rate of decline / growth of absolute and relative poverty Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

14. Share of population with income below the poverty line set at the international level with the purchasing power parity1) percentage of total population • The World Bank • Russian Federation – by PPP in international prices 2008 (2011-2012 – preliminary data); Brazil, India, ChinaandSouth Africa – by PPP in international prices 2005 • Preliminary data • Source of information: The World Bank database "Poverty and Inequality Database“ • 2006 Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

15. 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. Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

16. 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); Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

17. 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. Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

18. 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. Equivaliseddisposable incomeis expressed as follows: N= D/SE, N – per capita equivalised income; D – nominal household income; S– household size; E=0,5 - equivalence elasticity. УпрDepartment of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

19. Poverty risk index by gender and by age in 2008 according to the current methodology equivalence elasticity Ɛ=1 according to the OECD methodology equivalence elasticity Ɛ=0,5 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. Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)

20. Poverty risk index by gender and by age in 2008(according to the OECD methodology) Department of Living Standards and Household Surveys, Federal State Statistics Service (Rosstat)