Structure of Households’ Consumer Spending as a Factor and a Consequence of Socio-Economic Processes in Ukraine

  • А. V. Kudinova SHEI “Kyiv National Economic University named after Vadym Hetman”
  • D. V. Verba SHEI “Kyiv National Economic University named after Vadym Hetman”
Keywords: consumer spending, householdincome, national consumption pattern, Working’s model, immediate needs, the needs related to human development

Abstract

The correlation between characteristics of household consumption pattern in Ukraine and the household income is studied. The authors propose to consider the national household consumption pattern as not only a result of a certain level of income, relative prices and demographic characteristics of households, but also as a significant factor behind the human resources reproduction and the structure of national economy.

Two groups of consumer spending with critical influence on the consumer behavior of Ukrainian households are identified. The first group covers expenditures on foods and non-alcoholic beverages. The second one is the synthetic group covering expenditures on education, healthcare, culture and recreation, transport and communication. Higher correlation of these consumer expenditures with human development and human capital accumulation compared with the other groups of expenditures is chosen as the classification criterion.

By the methodology of consumer behavior pattern analysis, found in international scientific sources, the reduced share of spending on foods tends to be interpreted as the most explicit sign of progress in consumer spending patterns and a factor for reallocation of resources in human capital accumulation. Comparisons of the elasticity of demand for foods on the income with the elasticity of demand for goods with stronger effects for human development and accumulation of human capital can, therefore, characterize the potential of inclusion of the national model of consumer behavior in the set of factors for social development in Ukraine.

A model for correlation between the shares of the above groups in the consumer spending of Ukrainian households and their real incomes is built using the Working’s equation.

The elasticity of demand for foods on the income and the elasticity of demand for goods with stronger effects for human development and accumulation of human capital is assessed. The relatively high measure of the elasticity of demand for goods with stronger effects for human development and accumulation of human capital (negative one derived for the firsts group of consumer spending and positive one derived for the second group of consumer spending) leads to the conclusion that the increasing purchasing power of Ukrainian households is capable to significantly improve the structure of Ukrainian households’ consumer spending.

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Published
2016-06-20
How to Cite
KudinovaА. V., & Verba, D. V. (2016). Structure of Households’ Consumer Spending as a Factor and a Consequence of Socio-Economic Processes in Ukraine. Statistics of Ukraine, (2(73), 80-89. Retrieved from https://su-journal.com.ua/index.php/journal/article/view/98