4**. This indicator combined lifeexpectancy, educationalattainment, and income to create human development index – HDI. Since the only other waypermitting to evaluate development levels was GDP, many researchers sought another, morecomprehensive social and economic indicator. HDI was elaborated as a result of this search. TheReport stated that no indicator per se can comprehensively measure such a complex phenomenon. The Report alsoindicated that the search for further methodological and data refinements to theHDI continued. It shall be noted that HDI was not intended to replace othersocial and economic indicators used in the Report, since they are veryimportant for more comprehensive evaluation of situation across individualcountries*
The longevity index is measured aslife expectance at birth in the reported year. Index of educational attainment is measured as thecomposite adult literacy index (2/3 of weight) and combined primary, secondary,and tertiary enrollment(1/3 of weight). Until 1995 the average term of education was used in stead ofthe combined enrollment.Living standards are measured basing on per capita real GDP adjusted for localcost of living (in purchasing power parity (PPP) US $). The PPP determines thepurchasing power of localcurrency, i.e. the number of currency units necessary to purchase a similar representativeconsumer goods and services basket purchased for 1 US $ in the USA.
In order to build the composite humandevelopment index, fixed minimal and maximal values were set for each indicator:
Per capita real GDP (in PPP US $): 100 PPP US $ - 4,000 PPP US $.
For each HDI component individual indicescan be calculated as:
Actual value Xi –minimal value Xi
Maximal value Xi – minimal value Xi.
It is somewhat more difficult to computethe income index. The threshold level (y*) is set as the average per capitaworld income (PPP US $ 5,711), any excess is discounted according to thefollowing formula of utility of income, based on the Atkinsonformula*
W (y) = y* for 0 < y < y*
= y* + 2 ((y – y*) ) fory* < y < 2y*
= y* +2 (y* ) + 3 (y – 2y*) for 2y* < y < 3y*
In order to compute the discounted value ofmaximal income (PPP US $ 40,000) the following part of the Atkinson formula isused:
It is explained by the fact that the valueof PPP US $ 40,000 is between values of 7y* and 8y*. According to the aboveformula, the discounted value of maximal income (PPP US $ 40,000) is equal toPPP US $ 6,040.
6. “Analysis of Tendencies of Russia's Regions Development (typology ofregions, conclusions andrecommendations),” TACIS project (contract BIS/95/321/057).
This study comprises two typologies.
1) The basetypology of regions in accordance with respective social and economic situationuses simple indicators: dynamics of per capita incomes and dynamics ofindustrial production. Each indicator was initially divided into five levels.As a result, there were obtained 25 correlations of two indicators, forpurposes of this study integrated into 9 types>
Typology of regions as broken down by social(income level dynamics) and economic component (output volumeindex)
Republic of Sakha (Yakutia), Irkutsk oblast,Kemerovo oblast, Tyumen oblast
Republic of Buryatia, Nizhny Novgorod oblast, Primorsky krai, Republic of Tyva.
Type 9. Slightpreponderance of economic indicators as compared to the social component, bothcomponents display rather low values.
Omsk, Novosibirsk oblasts;
Republic of Mariy El, Stavropol krai, Kurgan oblast.
At the next stage the typology was mademore precise according to living standards indicators. In order to measuredifferences in living standards across regions there were used the ratiobetween per capita household incomes and the subsistence minimum (i.e. purchasepower of incomes). There was also used the specific weight of households withper capita incomes below the subsistence minimum as an indicator characterizingthe structure of living standards. Coefficient of “prosperity” across differenttypes of regions was introduced as an additional characteristic of livingstandards. This coefficient demonstrates how many times average incomes ofrelatively well-to-do households (i.e. with incomes above the subsistencelevel) exceed the subsistence level (see Table).
Typology of regions of Russia according to«prosperity» coefficient in 1995
Degree of stratification
(ranked by decrease incoefficient)
Moscow city, Tyumen oblast, Amur oblast, Kemerovooblast, Krasnoyarsk krai, Magadan oblast, Saint-Petersburg city, Kamchatkaoblast, Republic of Komi, Perm oblast, Belgorod oblast, Samara oblast, Tulaoblast.
Rostov oblast, Republic of Altai,Krasnodar krai, Kursk oblast, Kaliningrad oblast, Republic of Sakha (Yakutia),Bryansk oblast, Ivanovo oblast, Lipetsk oblast, Omsk oblast, Tomsk oblast,Republic of Tatarstan,Stavropol krai, Altai krai, Republic of Karelia, Udmurt Republic, Khabarovskkrai, Arkhangelsk oblast, Tver oblast, Republic of Khakasia, Republic ofBuryatia, Primorsky krai,Sakhalin oblast, Kirov oblast, Chuvash Republic, Leningrad oblast
1,0 – 1, 3
Ryazan oblast, Volgograd oblast,Moscow oblast, Astrakhan oblast, Saratov oblast, Vladimir oblast, Pskovoblast, Penza oblast, Republic of North Osetia, Republic ofKabardino-Balkaria, Novosibirsk oblast.
Republic of Mordovia, Kurgan oblast,Karach-Cherkesian Republic, Republic of Adygea, Republic of Mariy El, Republicof Kalmykia, Orenburg oblast, Republic of Dagestan, Chita oblast,Republic of Tyva
The importance of this coefficient (and,respectively, the typology, which bases on this coefficient) is that it permitsto measure how “rich” are relatively well-to-do strata of local populations andthe degree of property stratification.
The generalized (aggregate) typology ofregions in terms of living standards is based on two parameters: householdpurchasing power adjusted for the poverty level in 1995 and the change in realhousehold incomes in comparison with 1990 figures. Nine typological groups weresingled out according to these parameters. It shall be noted that the typologybased on living standards was somewhat different from the base typology ofregions according to social and economic situation (see Table).
Typology of regions of Russia as broken downby household living standards in 1995
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