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Economy, finances, management: Topical issues of science and practical activity

space SCIENTIFIC JOURNALS OF VINNITSA NATIONAL AGRARIAN UNIVERSITY

Issue №: 4 (44)

Published: 2019.08.08
DOI: 10.37128/2411-4413-2019-4


Description:
The magazine deals with the problems of the agricultural sector of the economy in the context of integration and processes of globalization. Attention is paid to the issues of development of digital economy, rural territories, technologies of enterprise management and organization of accounting, problems of legal support of economic processes, market tendencies of development of various branches of economy. Particular attention is paid to green tourism as a promising segment of the national economy.

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CONSUMER BEHAVIOUR IN THE MODERN MARKET ECONOMY

DOI: 10.37128/2411-4413-2019-4-4
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BROYAKA Antonina – Candidate of Economic Sciences, Associate Professor of the Department of Economics, Vinnytsia National Agrarian University (3 Soniachna Str., Vinnytsia, 21008, e-mail: broyaka@vsau.vin.ua).

Annotation

The article investigates the peculiarities of consumer behavior in modern market conditions. The theoretical and methodological approaches to the consumer behavior formation are highlighted; the exogenous and endogenous factors affecting it are identified. The various models of consumer behavior are characterized, depending on their income level.

It has been found that lower-income consumers are more likely to behave more rationally; they buy those products that meet urgent needs and are more attractive in price. The middle class mainly chooses products on the criterion of "price-quality". The degree of rationality in their behavior will depend on the stability of the economy and consumer expectations regarding real future income. As for high-income consumers, their demand does not depend on price, since the higher cost of the goods they buy undermines their wealth and status.

The level and dynamics of incomes of the population of Ukraine, including in urban and rural areas, are analyzed. The analysis shows an increase in the share of the population with high incomes (for comparison, in 2018, 27.4% of Ukrainians had incomes over UAH 5,160 against 12.6% in 2017), and this trend is observed as in cities (30.5% in 2018 compared with 13.6% in 2017) and in rural areas (21.2% in 2018 compared with 10.4% in 2017). However, rural residents predominantly have lower total incomes compared with urban residents: in 2016, according to surveys of the State Statistics Service of Ukraine, urban households received an average of 5842 UAH per month (per capita 28080 UAH), rural - 5871 UAH (per capita 2,706 UAH) in 2017 - respectively 7,749 UAH (per capita 3,725 UAH) and 7,542 UAH (per capita 3,476 UAH) in 2018 - respectively 9,722.5 UAH and 9073.3 UAH. The increase in income is due to an increase in the minimum and average level of wages, the volume of transfer payments (in particular, subsidies and other types of social assistance), income from entrepreneurial activity, and etc. A significant part of the incomes of the Ukrainian population is occupied by wages, which increased from 40.8% in 2010 to 45.6% in 2017. However, this is a statement of nominal income growth, which is not enough to meet even the basic needs of consumers in the conditions of rapid price increase. Despite the actual increase in incomes, the purchasing power of consumers in Ukraine is quite low, which is caused by a decrease in real incomes of the population.

The dynamics and cost structure of Ukrainian consumers is investigated. The imbalance of the budget of consumers, as well as the lack of actual income to meet the existing needs of the population, are revealed. The gap between the incomes of the population and its expenditures on the purchase of goods and services is quite small, meaning that Ukrainians spend almost all their money resources on current consumption, and thus the possibility of accumulating savings is low, which in turn reduces the prospect of increasing demand for more expensive goods, including long-term use, travel, real estate and more. The lowest share of expenditures on purchasing goods and services in the annual income in the period 2005-2017 was 76% in 2010 and the highest in 2017 was 89%. According to preliminary results of 2018, the share of expenses of Ukrainians in their income is on the average within 85%. Consumers spend more than half of their income on food, driven by low wages for most workers, high unemployment and underemployment, the disparity in current prices and real incomes of the population. The share of household expenditures on housing maintenance (including ongoing repairs), water, electricity, gas and other fuels is rising from 10.26% in 2010 to 18.3% in 2017. Consumers spend about 6% of their income on buying clothes and shoes (with 27.5% of the population having insufficient funds to upgrade their outerwear and shoes for the cold season once every 5 years). On average, only 4% of their budget is spent on healthcare.

The GDP indicator and deflator indices, which are indicators of the real consumer purchasing power, are analyzed. Comparing the GDP deflator and the consumption deflator, we see that their dynamics in 2010-2014 have had a similar trend, but since the turning point of 2016, which is characterized by an increase in physical GDP, consumers are behaving more restrained about purchases, even as the pace of growth slows and the gradual signs of overcoming the negative effects of the crisis. The reason for this behavior of consumers is pessimistic expectations about the future economic situation in the country, reduction of accumulated savings, and an increase in the poverty level of the population.

The happiness index is considered as a criterion that affects the propensity to consumption and saving. Analyzing the ranking of the countries of the world by the index of happiness, it should be noted that in 2018, Ukraine ranked 138th out of 156 countries, down 6 steps, compared to the previous year.

The measures to increase the economic efficiency of consumer behavior and maximization of its utility are proposed. Under the conditions of insufficient financial and material security of the population of Ukraine, an important step of the state for maintaining the purchasing power of consumers is subsidizing public utilities, providing benefits and subsidies for obtaining health care services, transportation, recreation, catering and more. However, such a tool will not give the expected results without comprehensive treatment of the country's economy. It is necessary to reform the remuneration system, in particular to work out an organizational and economic mechanism for legalizing the shadow wage, collecting relevant social contributions and taxes from it; to improve the methodology for establishing a living minimum and bring it into line with the real needs of the consumer; systematically carry out proper indexation of income, especially in private business; increase targeted investment in capital expansion of the real sector of the economy, which will simultaneously increase jobs quantity, GDP and household incomes; to revise the regulation of prices for of essential commodities and many other measures.

Keywords: behavior, corinne, income, vitrati, GDP, deflator, consume, purchase

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About journal

Topics of the journal:

051 Economics

071 Accounting and taxation

072 Finance, banking and insurance

073 Management

075 Marketing

076 Business, trade and exchange activities

241 Hotel, restaurant and catering 

281 Public administration

 

Key information:
ISSN (print): 2411-4413
DOI: 10.37128

The journal “Economy, finances, management: Topical issues of science and practice” is included in the "List of Scientific Professional Editions of Ukraine". 

The scientific edition is assigned the Category "Б" in the field of economics in specialties 051, 071, 072, 073, 075, 076, 241, 281

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The editorial board of the journal is guided by the principles of scientific, objectivity, professionalism, informational support of the most significant innovative researches, observance of standards of publishing ethics.

The purpose of the journal "Economics, finances, management: Topical issues of science and practical activity» is the coverage of leading scientific ideas in the economic, financial and management activities of the sectors of the national economy and the involvement of representatives of the domestic and foreign scientific professional community.

 

Objectives of the journal:

  • publication of research findings on innovation in the economy, financial and management spheres, innovation of production processes;
  • expanding partnerships with international scientific publishing organizations;
  • enhancing the culture of reviewing and annotating published material;
  • adherence to editorial ethics.

 

Article publishing is a paid service. Cost for printing in professional publications in accordance with the Decree of the Cabinet of Ministers of Ukraine of August 27, 2010 No. 796 "On approval of the list of paid services that can be provided by state educational institutions, other institutions of the educational system belonging to state and communal ownership" and the order Rector of the Higher Education University Mazura VA dated March 14, 2018 No. 93 “On setting the cost of printing in professional editions of the University”.

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History of journal:

It was founded in 1997 under the name "Bulletin of the Vinnytsia State Agricultural Institute". In 2010-2014 he was published under the title “Collection of scientific works of Vinnitsa National Agrarian University”.

From 2015 ”Economy, finances, management: Topical issues of science and practical activity” (Certificate of State Registration of Mass Media No. 21154-10954 of PR as of December 31, 2014)

According to the decision of National Council of Television and Radio Broadcasting of Ukraine from 25.04.2024 No. 1337 the scientific journal «Economy, finances, management: topical issues of science and practical activity» has the ID of the Media R30-05171.