METHODOLOGICAL PRINCIPLES OF ANALYSIS OF HOUSEHOLD EXPENDITURES IN UKRAINE

Abstract

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.