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Inequality and Volatility Moderation in Russia: Evidence from Micro-Level Panel Data on Consumption and Income

72 Pages Posted: 10 Jun 2009  

Yuriy Gorodnichenko

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Klara Sabirianova Peter

University of North Carolina - Chapel Hill; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Dmitriy Stolyarov

University of Michigan at Ann Arbor - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: June 1, 2009

Abstract

We construct key household and individual economic variables using a panel micro data set from the Russia Longitudinal Monitoring Survey (RLMS) for 1994-2005. We analyze cross-sectional income and consumption inequality and find that inequality decreased during the 2000-2005 economic recovery. The decrease appears to be driven by falling volatility of transitory income shocks. The response of consumption to permanent and transitory income shocks becomes weaker later in the sample, consistent with greater self-insurance against permanent shocks and greater smoothing of transitory shocks. Comparisons of RLMS data with official macroeconomic statistics reveal that national accounts may underestimate the extent of unofficial economic activity, and that the official consumer price index may overstate inflation and be prone to quality bias.

Keywords: Inequality, income, consumption, transition, Russia

JEL Classification: E20, J30, I30, O15, P20

Suggested Citation

Gorodnichenko, Yuriy and Sabirianova Peter, Klara and Stolyarov, Dmitriy, Inequality and Volatility Moderation in Russia: Evidence from Micro-Level Panel Data on Consumption and Income (June 1, 2009). Andrew Young School of Policy Studies Research Paper Series No. 09-09. Available at SSRN: https://ssrn.com/abstract=1417485 or http://dx.doi.org/10.2139/ssrn.1417485

Yuriy Gorodnichenko

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

HOME PAGE: http://www.econ.berkeley.edu/~ygorodni/index.htm

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Klara Sabirianova Peter (Contact Author)

University of North Carolina - Chapel Hill ( email )

Chapel Hill, NC 27599
United States

HOME PAGE: http://www.unc.edu/~kpeter

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Dmitriy Stolyarov

University of Michigan at Ann Arbor - Department of Economics ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States
734-764-3245 (Phone)
734-764-279 (Fax)

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