Comparative Analysis of Regional Differences in the Level of Welfare in Russia

This paper presents a simple summary statistic for the welfare of a country’s population, measured as a consumption equivalent, and compute its level and growth rate for a diverse set of regions. This welfare measure combines data on consumption, leisure, inequality, and mortality using the standard economics of expected utility. Previous studies consider largely effects of measures on the level of well-being across countries. While welfare is highly correlated with GDP per capita, deviations are often large Western Europe looks considerably closer to the United States, emerging Asia has not caught up as much, and many developing countries are further behind. This paper reveal, that there is the same effect across Russian regions. Each component introduced in this paper plays a significant role in accounting for welfare differences, with mortality being most important. This consumption-equivalent measure aims to answer questions such as: what proportion of consumption in Moscow, given the region values of leisure, mortality, and inequality, would deliver the same expected utility as the values in Krasnodar region?