Income as One of the Well-Being Factors of the Population of Ukraine: Current State
Abstract: The paper aims to analyze the Ukrainians income structure, to study of the ratio of real, nominal wages and the consumer prices index; to draw a scatter diagram, which makes it possible to make assumptions about a logarithmic nature of the relationship between indicators of average annual wages and GDP growth per capita by countries; to study the correlation between average annual rates GDP growth per capita and wages based on correlation-regression analysis; to determine the ways to improve the well-being in… Show more
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Methodological Principles of Analysis of Household Expenditures in Ukraine
The purpose of this work is to study the components of household expenses, identify general trends, dynamics, structure of expenses, and conduct an analysis of indicators of households in Ukraine, which show the dependence of household expenses on their incomes. Households play an important role in a market economy. After all, they produce demand for goods and services and are the main subjects of the consumer market. They have the opportunity to independently produce products, carry out entrepreneurial activities, are the owners of resources, play a significant role in the organization of social production and are important subjects in the market of financial services. Changes in the conditions of the development of the national economy, changes in the political landscape, new global challenges facing the governments of countries and crisis phenomena occurring in Ukrainian society significantly affect the growth of economic independence of households and their well-being, the problem of household expenses becomes especially important. Household expenditures reflect their social and economic status, the quality of life in society, the state of human development and the profile of their financial behavior. Among the main factors that determine the expenses of households are their incomes and prices. The information basis of the research is: materials from periodicals, works of scientists, Internet sources, statistical information, scientific and methodical literature. Engel's law, Engel's coefficient, and Engel's curve were used as methods of household expenditure research. As well as the method of theoretical knowledge of phenomena, the method of comparison and measurement, the method of grouping, the correlation-regression method. In the market economy, households are characterized by a certain duality: they are the main source of supply of all economic resources (labor, land, capital, entrepreneurial abilities) and at the same time, they make almost the largest monetary expenditures. In this sense, the household is opposed to the firm (enterprise), a distinction is made between the sphere of production, where firms operate, and the sphere of consumption, to which households belong. According to the interpretation of the State Statistics Service of Ukraine, a household is a set of persons who live together in one residential premises or part of it, provide themselves with everything necessary for life, run a joint economy, fully or partially combine and spend funds. The income remaining at the disposal of the household after paying the personal income tax to the budget is allocated to consumption and savings. The study of the influence of income on the level and structure of consumption of Ukrainian households based on a sample survey using statistical methods confirms the relevance of the provisions put forward in the 1950s. German economist and statistician E. Engel. During the researched period of 2010-2021, the average income per household increased from UAH 3369,8 to UAH 14247,9, but the total expenses remain extremely high and this indicates the poverty of households. In 2021, the average monthly total expenses for one household amounted to 91,3%. The majority of Ukrainian households have a high share of food expenses of 45,9%, and this is due to their low level of income. Expenditures on education are small and make up 3.4% of total monetary expenditures, these expenditures for the period 2010-2021 have increased from 1,3 to 3,4% and this may be related to the number of school-age children, form and place of study persons of the household. Over the study period, household spending on health care increased from 3,2% in 2010 to 15,2% in 2021, due to the COVID-19 pandemic, the purchase of medicines, etc. The population does not pay enough attention to taking care of their own health, disease prevention, and quality rest, and this situation is caused by low household incomes, and some scientists note that the traditional mentality of Ukrainians mostly does not involve the formation of a conscientious attitude to one's own health and leading a healthy lifestyle. In 2022, the full-scale invasion of Russia on the territory of Ukraine posed extremely difficult challenges to the internal food market of our state. According to the FAO Food Price Index, in 2022 its value became the highest in the history of observations (143,7 points), exceeding the 2021 figure by 14 %. At the same time, the consumer price index for food products and non-alcoholic beverages in Ukraine in 2022 amounted to 126,6%, i.e. the price increase was actually twice as high. Scientists predict that in the future we should expect a further increase in prices with the limited purchasing power of the population, and the share of expenditure on food products in Ukraine will remain as high. According to the State Statistics Service, inflation in the consumer market of Ukraine in January 2023 compared to December 2022 was 0,8%. In the first month of the year, consumer prices increased by 26% compared to January 2022. Summing up, it should be noted that the household is an important subject of the development of the economy of Ukraine, which provides factors of production, produces products, provides services, consumes a part of the received income and makes savings. Household expenses ensure the reproduction of households, create incentives for the development and improvement of production, determine the purpose of its operation, which is based on satisfying needs. Consumer spending accounts for the bulk of household income. Cash income of households leads to satisfaction of their own needs, changes the structure of current consumption and directions of use of income. An increase in income, at constant prices, leads to an increase in costs. Household spending is also influenced by prices. Yes, at a constant level of income, but under the condition of rising prices, household spending on consumption will increase. Therefore, expenses form consumer behavior, which is a kind of indicator of the development of the national economy and is related to aggregate income, demand, and market prices. An increase in household incomes will increase their standard of living and contribute to the country's economic development.
Methodological Principles of Analysis of Household Expenditures in Ukraine
The purpose of this work is to study the components of household expenses, identify general trends, dynamics, structure of expenses, and conduct an analysis of indicators of households in Ukraine, which show the dependence of household expenses on their incomes. Households play an important role in a market economy. After all, they produce demand for goods and services and are the main subjects of the consumer market. They have the opportunity to independently produce products, carry out entrepreneurial activities, are the owners of resources, play a significant role in the organization of social production and are important subjects in the market of financial services. Changes in the conditions of the development of the national economy, changes in the political landscape, new global challenges facing the governments of countries and crisis phenomena occurring in Ukrainian society significantly affect the growth of economic independence of households and their well-being, the problem of household expenses becomes especially important. Household expenditures reflect their social and economic status, the quality of life in society, the state of human development and the profile of their financial behavior. Among the main factors that determine the expenses of households are their incomes and prices. The information basis of the research is: materials from periodicals, works of scientists, Internet sources, statistical information, scientific and methodical literature. Engel's law, Engel's coefficient, and Engel's curve were used as methods of household expenditure research. As well as the method of theoretical knowledge of phenomena, the method of comparison and measurement, the method of grouping, the correlation-regression method. In the market economy, households are characterized by a certain duality: they are the main source of supply of all economic resources (labor, land, capital, entrepreneurial abilities) and at the same time, they make almost the largest monetary expenditures. In this sense, the household is opposed to the firm (enterprise), a distinction is made between the sphere of production, where firms operate, and the sphere of consumption, to which households belong. According to the interpretation of the State Statistics Service of Ukraine, a household is a set of persons who live together in one residential premises or part of it, provide themselves with everything necessary for life, run a joint economy, fully or partially combine and spend funds. The income remaining at the disposal of the household after paying the personal income tax to the budget is allocated to consumption and savings. The study of the influence of income on the level and structure of consumption of Ukrainian households based on a sample survey using statistical methods confirms the relevance of the provisions put forward in the 1950s. German economist and statistician E. Engel. During the researched period of 2010-2021, the average income per household increased from UAH 3369,8 to UAH 14247,9, but the total expenses remain extremely high and this indicates the poverty of households. In 2021, the average monthly total expenses for one household amounted to 91,3%. The majority of Ukrainian households have a high share of food expenses of 45,9%, and this is due to their low level of income. Expenditures on education are small and make up 3.4% of total monetary expenditures, these expenditures for the period 2010-2021 have increased from 1,3 to 3,4% and this may be related to the number of school-age children, form and place of study persons of the household. Over the study period, household spending on health care increased from 3,2% in 2010 to 15,2% in 2021, due to the COVID-19 pandemic, the purchase of medicines, etc. The population does not pay enough attention to taking care of their own health, disease prevention, and quality rest, and this situation is caused by low household incomes, and some scientists note that the traditional mentality of Ukrainians mostly does not involve the formation of a conscientious attitude to one's own health and leading a healthy lifestyle. In 2022, the full-scale invasion of Russia on the territory of Ukraine posed extremely difficult challenges to the internal food market of our state. According to the FAO Food Price Index, in 2022 its value became the highest in the history of observations (143,7 points), exceeding the 2021 figure by 14 %. At the same time, the consumer price index for food products and non-alcoholic beverages in Ukraine in 2022 amounted to 126,6%, i.e. the price increase was actually twice as high. Scientists predict that in the future we should expect a further increase in prices with the limited purchasing power of the population, and the share of expenditure on food products in Ukraine will remain as high. According to the State Statistics Service, inflation in the consumer market of Ukraine in January 2023 compared to December 2022 was 0,8%. In the first month of the year, consumer prices increased by 26% compared to January 2022. Summing up, it should be noted that the household is an important subject of the development of the economy of Ukraine, which provides factors of production, produces products, provides services, consumes a part of the received income and makes savings. Household expenses ensure the reproduction of households, create incentives for the development and improvement of production, determine the purpose of its operation, which is based on satisfying needs. Consumer spending accounts for the bulk of household income. Cash income of households leads to satisfaction of their own needs, changes the structure of current consumption and directions of use of income. An increase in income, at constant prices, leads to an increase in costs. Household spending is also influenced by prices. Yes, at a constant level of income, but under the condition of rising prices, household spending on consumption will increase. Therefore, expenses form consumer behavior, which is a kind of indicator of the development of the national economy and is related to aggregate income, demand, and market prices. An increase in household incomes will increase their standard of living and contribute to the country's economic development.
Іncomes and Expenses of the Rural Population and Their Impact on the Standart of Living
One of the leading branches of the economy, which provides the population with food, and industry with raw materials, is agriculture. The leading sector of which are rural households, which produce about 40% of agricultural products and participate in solving problems related to providing the population with food products. Most of the products produced by them are used to meet their own needs, and a small part is sold on the market. The purpose of writing the article is to highlight the structure of incomes and expenses of rural households for the period 2018-2021, to study the impact of incomes and expenses on the standard of living of rural households and to increase consumption in rural households depending on the growth of incomes. The results of the study were obtained according to the data of the State Statistics Service regarding the incomes and expenses of rural households for the period 2018-2021. In the process of work, statistical analysis was used as a method of understanding phenomena, comparison and measurement as empirical methods of conducting research, the method of grouping, and the method of selective observation. The interpretation of the essence of the concept of «household» is considered. It has been established that ownership of resources is of great importance in shaping the well-being of households. The more resources a household owns, the wealthier the household members are. All that a household owns is its wealth, but households do not have the same wealth and different amounts of income. Property and resources owned by the family (wealth) are only a source of household income. How a household manages its wealth depends on its level of income and, accordingly, the level of satisfaction of various needs. The household is the basis of the economic well-being of every state and affects the state of material well-being of a rural or urban family. There is always a difference in income among households. Therefore, the standard of living of the population depends on the incomes and expenses of households. The main incomes of the household are: rent, rent, wages, pensions, scholarships, benefits, insurance payments, fees, profit from own business and ownership of financial assets, dividends, interest on bank deposits, income from inheritance, royalties. It has been studied that monetary incomes and total resources in Ukraine per household. Having researched and analyzed the monetary incomes and expenses of rural households during 2018-2021, it can be stated that the structure of resources has improved, that is, the specific weight of monetary incomes has increased by 419%, in particular, wages – by 62,3%, income from entrepreneurial activities and self-employment – by 21,5%, from property – by 25,4%, the cost of consumed products obtained from the OPG – by 22%. There is also an increase in the share of benefits, benefits and subsidies by 66.4%, which indicates an increase in rural households that need social protection. In 2021, in the structure of monetary incomes, the largest share is occupied by pension incomes of 17,2%, this shows an increase in the number of people of retirement age in the village and indicates an increase in the number of people in need of social protection. It was found that during 2018-2021, there is a positive dynamic that contributes to the increase in the purchasing power of the rural population, which occurs due to the increase in the wages of the rural population (from 41,5 in 2018 to 47,5% in 2021). However, despite the positive dynamics of wage growth, its level in agriculture remains very low. After all, it is formed under the influence of inflation and the economic situation in the country, state regulation, etc. During 2017-2021, spending on food products decreased from 51 to 48,9%, spending on non-food spending increased from 41.9 to 42,4%, and spending on non-consumer goods and services from 7,1 to 8%. 7%. The reason for this is the lack of funds necessary for their purchase, so rural households are independently engaged in the production of food products to meet personal needs. The lack of consumption of the most important products is compensated by the increase in the consumption of oil, other vegetable fats and flour products. The increase in the share of expenditure on non-food products characterizes the improvement of the standard of living of rural households. However, the standard of living of rural households is low. The low level of wages of the able-bodied population, cultural and household needs, underdeveloped infrastructure negatively affect the standard of living of the rural population and lead to their migration to the city, which negatively affects the demographic situation in the countryside. Therefore, the state should take measures that will improve the standard of living of the rural population and increase its entrepreneurial potential, namely, improve the demographic situation, raise wages to a decent level that will be stable and timely, pensions, social transfers, increase social guarantees and standards, improve social protection of the rural population and the infrastructure of villages, to establish a system for selling products of rural households. Russia's war against Ukraine led to a deterioration in the standard of living of households. Loss of work, stable income, forced unplanned expenses and population migration, threat to life and fear have influenced the reduction of incomes and increase of household expenses. However, it forced them to change their views in all areas of life, caused the emergence of new impulses regarding the development of the country, the economy, improvement of the standard of living and mentality.
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