Senior Economist The World Bank

In Russia, ROSSTAT, the Statistical Agency of the Federation, monitors poverty based on the annual Household Budget Survey. Although the HBS collects very detailed information on household consumption, the information on other dimensions of well-being is very limited. This has restricted both the analyses that can be undertaken with HBS, and the methodological choices for the construction of the welfare aggregate. Aware of these limitations, ROSSTAT revised the HBS questionnaire in the last quarter of 2005. In this paper, we use a multi-topic household survey, NOBUS, which collects a richer set of data on consumption and household characteristics, to illustrate two points. First, we show how household welfare and poverty can be measured with a survey specially designed for this purpose. Second, we investigate the impact of alternative methodological choices on poverty and inequality, such as accounting for the consumption of durables, housing, subsidies for privileged citizens and rural-urban differences in the cost of living. We compare different welfare aggregates – constructed to take into account the data limitations of HBS or the methodological choices currently endorsed by ROSSTAT – with a benchmark aggregate constructed according to the recommendations of renowned internationa