Deprivation Index: Construction and Evaluation of the Current Situation in Russia

This paper investigates poverty as an actual problem for research practice and for national interests, because of connection of this phenomena with social politics of government. Different indicators are used for estimation of poverty rate. One of them is deprivation index, which measures relative poverty rate within deprivation approach. Russian researchers usually construct the list of items for a deprivation index using expert opinions and respondents’ responses. The main goal of this study is construction of deprivation index on already existing empirical database without expert opinion but by means of creation a model of latent variable of deprivation for estimation of deprivation index rate in Russia. The initial list of deprivation indicators was formed on empirical database of RLMS research (2014). On the purpose of selection indicators in the most qualitative way, three various methods of item coherence assessment have been applied: principal component analysis, Cronbach's alpha coefficient, Rasch model. Within the analysis of lists constructed by means of three methods the system of their comparison has been developed. The system consists of evaluation of formal indicators models quality and interpretive adequacy of items lists. The comparison of lists allowed choosing the list of deprivation indicators formed by principal component analysis as final list. It contains coherent indicators of deprivation also the list is balanced both in term of model quality and interpretive adequacy. Analysis of deprivation index, which based on list formed by principal component analysis demonstrates that Russian households living in villages and settlements of city type with an average per capita income less than 15 000 rubles are the most deprived group.