Costs of Living and Real Incomes in the Russian Regions

Comparisons of well-being indicators in monetary terms across regions of a country do not provide insights into actual differences in well-being. The reason is variability of price levels across regions, especially in large countries like Russia. Thus, the indicators should be adjusted to the regional price levels, which, in turn, poses a problem of estimating such levels. In Russia, official data on price levels (termed cost-of-living indices) are available; however, they are by city/town rather than by region, so being unsuitable for regional studies. This paper describes the methodology of aggregating the city cost-of-living indices to the regional ones and presents the results obtained for 2016–2020. These results serve as a mean for estimation of priceadjusted regional incomes per capita (regional real incomes). As can be expected, taking account of regional
costs of living smooths to some extent the pattern of regional inequality. A comparison of the European and Asian parts of Russia suggests that real income per capita in the latter permanently remains lower than in the former.