EQUIVALENCE SCALE ESTIMATION FOR REGIONS OF THE RUSSIAN FEDERATION

In this article the equivalence scales estimation for the households of the Russian regions is made using the data from Budget Survey of Households in Russian Federation for 2013 year. Equivalence scales calculation is made by using a regression estimate of the Engel curve. Authors found a significant difference between the scale officially adopted in Russia and the equivalence scales for the Russian regions. Underestimating of the economies of scale effect by official scale can cause the deviations in the detection of poor household and targeting anti-poverty programs on them. Authors show that in the majority of Russian regions there are differences in the economies of scale for households comprising person of working age with the inclusion of an equal number of either children or pensioners. Only for 10 Russian regions the regressions coefficients before the variables indicating respectively the number of children and pensioners are the same. Also most of the Russian regions differ in the estimated equivalence scales with the OECD-modified scale, which is currently used by Eurostat. Estimated scales for the households including two adults are comparable with OECD-modified scale in one third of Russian regions, and for household including children - in 46% of Russian regions.