Convergence of food consumption across Ukrainian regions: approach using spatial panel data models

Abstract

Purpose. The article studies the convergence between the regions of Ukraine in terms of the basic foodstuff consumption per capita during 2000–2019, taking into account the effects of spatial interaction across regions. Methodology / approach. The convergence analysis between regions of Ukraine is based on the concept of β-convergence which can be tested using spatial econometric models namely spatial autoregressive models and spatial error models. The need for considering spatial interaction can be explained by the fact that regions are characterized by constant interaction with each other. Therefore, region should not be considered as isolated objects in space in empirical research with usage of panel data. Ignoring the spatial interaction between regions and using standard evaluation procedures can reduce the reliability and validity of the obtained results to some extent. Results. The results of our calculation confirm the process of β-convergence of average per capita consumption of all food groups, which means that food consumption in regions with an initial low level of consumption is growing faster than in regions with high initial levels of consumption. Also, as part of the use of spatial econometric models the convergence process was determined to be influenced by spatial interaction between regions while the influence of neighbouring regions has a positive effect on food consumption in particular region. Originality / scientific novelty. The article further develops the main ideas of modeling interregional differentiation based on convergence theory and for the first time, spatial econometric models were used to estimate β-convergence of Ukrainian regions by the levels of consumption of basic foodstuffs. Practical value / implications. The approach proposed by the authors and the obtained results can be used both by state authorities on agrarian policy and food issues, and by enterprises of the agricultural sector in the analysis and forecasting of trends in the consumption of basic foodstuffs at the regional level; when planning the production, processing and delivery of agricultural products, when planning state or regional trade policy in the field of food. At the same time, the inclusion of spatial effects in the model of evaluating convergence will allow policymakers to take into account the geographical features of the convergence process and, accordingly, make more informed decisions to reduce the differentiation of regions of Ukraine by the levels of consumption of basic foodstuffs.