Methodologies of Analyzing Inter-Regional Income Inequality and Their Applications to Russia

Gluschenko, Konstantin (2010): Methodologies of Analyzing Inter-Regional Income Inequality and Their Applications to Russia. Published in: Регион: экономика и социология No. 1 (2010): pp. 54-87.

Abstract

This paper provides an overview of methodologies used to analyze inter-regional income inequality, and a critical survey of empirical studies that deal with Russian regions. It discusses implications of the growth theory regarding dynamics of inter-economy income inequality. Methodologies for empirically analyzing income inequality are classified as the cross-section approach, time series approach, and distribution dynamics approach. Specific methodologies are described within the framework of this classification, touching upon the subject of their applicability fields. The survey of studies on income inequality among Russian regions summarizes more than 30 papers grouped according to main approaches used for the analyses.

• Item Type: MPRA Paper
• Language: English
• Keywords: spatial inequality, convergence, economic growth, beta-convergence, distribution dynamics, income mobility, Russian regions
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C20 - General; D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O18 - Urban, Rural, Regional, and Transportation Analysis ; Housing ; Infrastructure; P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P25 - Urban, Rural, and Regional Economics; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R15 - Econometric and Input-Output Models ; Other Models

References

ACCRA (2002). ACCRA Cost of Living Index, 35 (4).

Ahrend, R. (2005). Speed of reform, initial conditions or political orientation? Explaining Russian regions’ economic performance. Post-Communist Economies, 17(3), pp. 289-317.

Anselin, L. (2001). Spatial econometrics. In B. Baltagi (ed.), A Companion to Theoretical Econometrics. Oxford: Blackwell, pp. 310-330.

Anselin, L. (2002). Under the hood. Issues in the specification and interpretation of spatial regression models. Agricultural Economics, 27 (3), pp. 247-267.

Arbia, G. (2006). Spatial Econometrics: Statistical Foundations and Applications to Regional Convergence. Berlin, Heidelberg, New York: Springer.

Azariadis, C., and A. Drazen (1990). Threshold externalities in economic development. Quarterly Journal of Economics, 105 (2), pp. 501-526.

Babetski, J., and M. Maurel (2002). Regional convergence and institutional development of Russia. In Samson, I., X. Greffe and E. Brunat (eds.), Russia's Opening and the Common European Economic Space, Moscow: RECEP.

Balatskii, E.V., and K.M. Saakyants (2006). Income’s divergence and economic growth. In Korovkin, A.G. (ed.), Scientific Articles – Institute of Economic Forecasting, Russian Academy of Sciences, Moscow: MAKS Press, pp. 583-601. [In Russian.]

Barro, R.J., and X. Sala-i-Martin (1992). Convergence. Journal of Political Economy, 100 (2), pp. 223-251.

Barro, R.J., and X. Sala-i-Martin (2004). Economic Growth. 2nd ed. Cambridge, MA, London: MIT Press.

Berkowitz, D., and D. N. DeJong (2002). Accounting for growth in post-Soviet Russia. Regional Science and Urban Economics, 32 (2), pp. 221–239.

Berkowitz, D., and D. N. DeJong (2003). Policy reform and growth in post-Soviet Russia. European Economic Review, 47 (2), pp. 337–352.

Berkowitz, D., and D. N. DeJong (2005). Entrepreneurship and post-socialist growth. Oxford Bulletin of Economics and Statistics, 67 (1), pp. 25–46.

Berkowitz, D., and D. N. DeJong (2011). Growth in post-Soviet Russia: a tale of two transitions. Journal of Economic Behavior and Organization, 79 (1–2), pp. 133–143.

Berkowitz, D., and J. E. Jackson (2006). Entrepreneurship and the evolution of income distributions in Poland and Russia. Journal of Comparative Economics, 34 (2), pp. 338–356.

Bernard, A.B., and S.N. Durlauf (1995). Convergence in international output. Journal of Applied Econometrics, 10 (2), pp. 97-108.

Bernard, A.B., and S.N. Durlauf (1996). Interpreting tests of the convergence hypothesis. Journal of Econometrics, 71 (1), pp. 161-173.

Bogomolova, T.Yu., V. S. Tapilina, and P.S. Rostovtsev (2001). The Impact of Income Mobility on the Change of Income Inequality. Novosibirsk: Novosibirsk State University. [In Russian.]

Borts, G.H., and J.L. Stein (1964). Economic Growth in a Free Market. New York: Columbia University Press.

Bradshaw, M. J., and K. Vartapetov K. (2003). A new perspective on regional inequalities in Russia. Eurasian Geography and Economics, 44 (6), pp. 403-429.

Buccellato, T. (2007). Convergence across Russian regions: a spatial econometrics approach. CSESCE Working Paper No. 72.

Carlino, G.A., and L. Mills (1996). Testing neoclassical convergence in regional incomes and earnings. Regional Science and Urban Economics, 26 (6), pp. 565-590.

Carluer, F. (2005). The dynamics of Russian regional clubs: the time of divergence. Regional Studies, 39 (6), pp. 713–726.

Carluer, F., and E. Sharipova (2004). The unbalanced dynamics of Russian regions: towards a real divergence process. East-West Journal of Economics and Business, 2004, 7 (1), pp. 11-37.

Diewert, W.E. (1999). Axiomatic and economic approaches to international comparisons. In Heston, A., and R. E. Lipsey (eds.), International and Interarea Comparisons of Income, Output, and Prices. Chicago: University of Chicago Press, pp. 13-87.

Dolinskaya, I. (2002). Transition and regional inequality in Russia: Reorganization or procrastination? IMF Working Paper No. WP/02/169.

Durlauf, S. N., and D. Quah (1999). The new empirics of economic growth. In: Taylor, J. and M. Woodford (eds.), Handbook of Macroeconomics, Oxford: Elsevier, Vol. 1A, pp. 235–308.

Esteban, J., and D. Ray (1994). On the measurement of polarization. Econometrica, 62 (4), 819-851. Estban, J., and D. Ray (2007). A comparison of polarization measures. UFAE and IAE Working Paper No. 700.07.

Evans, P., and G. Karras (1996). Do economies converge? Evidence from a panel of U.S. states. Review of Economics and Statistics, 78 (3), 384-388.

Fedorov, L. (2002). Regional inequality and regional polarization in Russia, 1990-99. World Development, 30 (3), pp. 443-456.

Formby, J.P., W.J. Smith, and B. Zheng (2004). Mobility measurement, transition matrices and statistical inference. Journal of Econometrics, 120 (1), pp. 181-205.

Friedman, M. (1992). Do old fallacies ever die? Journal of Economic Literature, 30 (4), pp. 2129-2132.

Galbraith, J. K., L. Krytynskaia, and Q. Wang (2004). The experience of rising inequality in Russia and China during the transition. European Journal of Comparative Economics, 1 (1), pp. 87-106.

Galor, O. (1996). Convergence? Inferences from theoretical models. Economic Journal, 106 (437), pp. 1056-1069.

Galton, F. (1886). Regression towards mediocrity in hereditary stature. Journal of the Anthropological Institute of Great Britain and Ireland, 15, pp. 246-263.

Gluschenko, K. (2006a). Russia’s common market takes shape: price convergence and market integration among Russian regions. BOFIT Discussion Paper No. 7.

Gluschenko, K. (2006b). Biases in cross-space comparisons through cross-time price indexes: the case of Russia. BOFIT Discussion Paper No. 9.

Goskomstat of Russia (1998). Methodological Regulations on Statistics. Issue 2. Moscow. [In Russian.]

Granberg, A.G., and Yu. S. Zaitseva (2002). Production and use of gross regional product: inter-regional comparisons. Article 2. Adjustments of GRP according to spatial differences in purchasing power of money. Rossiyskiy Ekonomicheskiy Zhurnal [Russian Economic Journal], No. 11-12, pp. 48-70. [In Russian.]

Granberg, A.G., and Yu. S. Zaitseva (2003). Inter-regional comparisons of gross regional product in the Russian Federation. Voprosy Statistiki [Problems of Statistics], No. 2, pp. 3-17. [In Russian.]

Greene, W.H. (2003). Econometric Analysis. 5th ed. Upper Saddle River, NJ: Pearson Education.

Herzfeld, T. (2008). Interregional income distribution: a comparison of Russian and Chinese experience. Post-Communist Economies, 20 (4), pp. 431-447.

Hill, F., and C. Gaddy (2003). The Siberian Curse: How Communist Planners Left Russia in the Cold. Washington, DC: Brooking Institution Press.

Hobijn, B., and P.H. Franses (2000). Asymptotically perfect and relative convergence of productivity. Journal of Applied Econometrics, 15 (1), pp. 59-81.

Kholodilin, K.A., A. Oshchepkov, and B. Siliverstovs (2009). The Russian regional convergence process: where does it go? DIW Berlin Discussion Paper No. 861.

Kwon, G., and A. Spilimbergo (2009). Regional Volatility in Emerging Countries: The Case of Russia. Economics of Transition, 17 (1), pp. 97–119.

Lavrovsky, B.L., and Ye. A. Shiltsin (2009). Russian regions: leveling or stratification? Ekonomika i Matematicheskie Metody [Economics and Mathematical Methods], 45 (2), pp. 31-36. [In Russian.]

Ledyaeva, S., and M. Linden (2008). Determinants of economic growth: empirical evidence from Russian regions. European Journal of Comparative Economics, 5 (1), pp. 87-105.

LeSage, J., and R.K. Pace (2009). Introduction to Spatial Econometrics. Boca Raton, FL: CRC Press.

Litvintseva, G.P., O.V. Voronkova, and E.A. Stukalenko (2007). Regional income inequality and poverty level in Russia: an analysis adjusted for purchasing power of the ruble. Studies on Russian Economic Development, 18 (6), pp. 641-649.

Lucas, R. E. (1993). Making a miracle. Econometrica, 61 (2), pp. 251-272.

Lugovoy, O., V. Dashkeyev, I. Mazayev, D. Fomchenko, Е. Polyakov, and A. Hecht (2007). Analysis of Economic Growth in Regions: Geographical and Institutional Aspect. Moscow: IET.

Magrini, S. (2004). Regional (di)convergence. In Henderson, V., and J.-F. Thisse (eds.), Handbook of Regional and Urban Economics, Vol. 4. Amsterdam, New York, and Oxford: Elsevier Science, pp. 2741-2796.

Melnikov, R.M. (2005). Analysis of the dynamics of inter-regional economic inequality: foreign approaches and the Russian practice. Region: Ekonomika i Sotsiologia [Region: Economics and Sociology], No. 4, pp. 3-18. [In Russian.]

Melnikov, R.M. (2007). Inter-regional economic inequality in the Russian economy: trends and prospects. Regionalnaya Ekonomika: Teoria i Praktika [Regional Economics: Theory and Practice], No. 8, pp. 26-33. [In Russian.]

Melnikov, R.M. (2008). Inter-regional economic inequality in the Russian economy: trends and prospects. Regionalnaya Ekonomika: Teoria i Praktika [Regional Economics: Theory and Practice], No. 3, pp. 7-14. [In Russian.]

Mikheeva, N. (1999). Analysis of interregional inequality in Russia. Studies on Russian Economic Development, 10 (5), pp. 514-521.

Mikheeva, N. (2000). Differentiation of social and economic situation in the Russian regions and problems of regional policy. EERC Working Paper No. 99/09.

Mitsek, S.A., and E.B. Mitsek (2009). Investments, productivity, and personal incomes in regions of the Russian Federation. Regionalnaya Ekonomika: Teoria i Praktika [Regional Economics: Theory and Practice], No. 36, pp. 25-28. [In Russian.]

Nahar, S., and B. Inder (2002). Testing convergence in economic growth for OECD countries. Applied Economics, 34 (16), pp. 2011-2022.

Phillips, P.C.B., and D. Sul (2007). Transition modeling and econometric convergence tests. Econometrica, 75 (6), pp. 1771-1855.

Quah, D. (1993a). Empirical cross-section dynamics in economic growth. European Economic Review, 37 (2-3), pp. 426-434.

Quah, D. (1993b). Galton’s fallacy and tests of the convergence hypothesis. Scandinavian Journal of Economics, 95 (4), pp. 427-443.

Quah, D. (1996). Convergence empirics across economies with (some) capital mobility. Journal of Economic Growth, 1 (1), pp. 95-124.

Quah, D. (1997). Empirics for growth and distribution: stratification, polarization, and convergence clubs. Journal of Economic Growth, 2 (1), pp. 27-59.

Rey, S. J. (2001). Spatial empirics for economic growth and convergence. Geographical Analysis, 33 (3), pp. 194-214.

Romer, P.M. (1986). Increasing returns and long-run growth. Journal of Political Economy, 94 (5), pp. 1002-1037.

Rosstat (2008). Regions of Russia. Socio-Economic Indicators. 2008, Moscow. [In Russian.]

Silverman, B. W. (1986). Density Estimation for Statistics and Data Analysis. London: Chapman and Hall.

Solanko, L. (2006). Essays on Russia’s Economic Transition. Helsinki: Bank of Finland.

Solanko, L. (2008). Unequal fortunes: a note on income convergence across Russian regions. Post-Communist Economies, 20 (3), pp. 287–301.

Wodon, Q., and S. Yitzhaki (2006). Convergence forward and backward? Economics Letters, 92 (1), pp. 47-51.

Wolfson, M.C. (1994). When inequalities diverge. American Economic Review, 84 (2), 353-358.

Yemtsov, R. (2005). Quo vadis? Inequality and poverty dynamics across Russian regions. In: Kanbur, R., and A.J. Venables (eds.), Spatial Inequality and Development. Oxford: Oxford University Press, pp. 348-397.

Yitzhaki, S., and Q. Wodon (2004). Mobility, inequality, and horizontal equity. In Amiel, Y., and J. A. Bishop (eds.), Research on Economic Inequality, Vol. 12. Oxford: Elsevier, pp. 179-199.

Zhang, X., and R. Kanbur (2001). What difference do polarization measures make? An application to China. Journal of Development Studies, 37 (3), 85-98.

Zubarevich, N.V. (2009). Myths and realities of spatial inequality. Obshchestvennyie Nauki i Sovremennost [Social Sciences and the Present], No. 1, pp. 38-53. [In Russian.]