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The article is devoted to the adaptation of Engel's curve tools for evaluating the wellbeing of Ukrainian households. In particular, the assessment of the welfare inequality, observed between households with the lowest equivalent per capita income and the most affluent households, as well as the main trends in the change of the consumption structure for the period 2014-2020. The research is based on the concept that overcoming the concentration of consumer spending around the purchase of food is a necessary condition for the launch of microeconomic mechanisms of socio-economic development because it allows households to actively invest in the accumulation of human capital and thus overcomes the monopoly of budget financing of social sphere industries. To assess the level of satisfaction with food needs, the Engel line "income - food consumption" was constructed and the coefficient of elasticity of food consumption from income was determined. Similar calculations were made concerning the consumption of goods created by the educational sector. According to the results of the Engel function development, the income elasticity of the absolute amount of food consumption is equal to 0.47: an additional percentage of income encourages households to increase the amount of food consumption by 0.47%. According to our calculations, the income elasticity of educational goods consumption is equal to 0.928 (an additional percentage of real income encourages Ukrainian households to increase the amount of educational goods consumption by 0.93%). Therefore, Ukrainian households value education enough and tend to use economic opportunities (income released from priority needs satisfaction) for expanding education consumption. Both assessments of elasticity coefficients indicate that the achieved level of meeting food needs for the vast majority of Ukrainian households does not allow them to count on the release of their funds from meeting basic current needs and the expansion of those expenses that have the character of investing in human capital and have a pronounced positive impact on the qualification level of labor resources and the productivity of their use in the national economy. [ABSTRACT FROM AUTHOR]

The article is devoted to the development of tools for evaluating the level and dynamics of Ukrainian households' well-being, by considering the availability of key groups of goods for households with different levels of per capita income. The results should contribute to taking into account a greater number of essential aspects of the households lifestyle and economic capabilities for assessing the achieved level of well-being, its dynamics, the differences of its components for different population groups, allowing to make policy and programs for its implementation more sensitive to the real needs of different aim groups. Engel's curves (defined by the linear form of consumption dependence on income – Working's function) and income elasticity of consumption were used to assess the degree of satisfaction of needs in two commodities, which are key for assessing the households' well-being. It was evidenced, that the still high (more than two times higher than in developed countries) income elasticity of food consumption indicates the extreme limitation of the resource provision for investing in the development of human capital by the households. At the same time, the propensity of households to invest additional income in the purchase of goods created in healthcare is quite high – at the level of developed countries. More affluent households (which were expected to have a higher income elasticity of healthcare goods consumption) are more actively using the advances of insurance medicine, while less affluent households still rely only on "out-of-pocket" healthcare costs. So, relatively poorer households are faced a clear lack of resources to meet their needs: the absolute amount of healthcare goods consumption for the least wealthy households is reduced against the background of the increase in the share of relevant expenses in the composition of consumer spending.

The article is devoted to the adaptation of Engel's curve tools for evaluating the well-being of Ukrainian households. In particular, the assessment of the welfare inequality, observed between households with the lowest equivalent per capita income and the most affluent households, as well as the main trends in the change of the consumption structure for the period 2014-2020. The research is based on the concept that overcoming the concentration of consumer spending around the purchase of food is a necessary condition for the launch of microeconomic mechanisms of socio-economic development because it allows households to actively invest in the accumulation of human capital and thus overcomes the monopoly of budget financing of social sphere industries. To assess the level of satisfaction with food needs, the Engel line "income - food consumption" was constructed and the coefficient of elasticity of food consumption from income was determined. Similar calculations were made concerning the consumption of goods created by the educational sector. According to the results of the Engel function development, the income elasticity of the absolute amount of food consumption is equal to 0.47: an additional percentage of income encourages households to increase the amount of food consumption by 0.47%. According to our calculations, the income elasticity of educational goods consumption is equal to 0.928 (an additional percentage of real income encourages Ukrainian households to increase the amount of educational goods consumption by 0.93%). Therefore, Ukrainian households value education enough and tend to use economic opportunities (income released from priority needs satisfaction) for expanding education consumption. Both assessments of elasticity coefficients indicate that the achieved level of meeting food needs for the vast majority of Ukrainian households does not allow them to count on the release of their funds from meeting basic current needs and the expansion of those expenses that have the character of investing in human capital and have a pronounced positive impact on the qualification level of labor resources and the productivity of their use in the national economy.

Why are price levels in Germany lower than in Switzerland despite comparable productivity levels and the possibility of goods arbitrage in this region? Standard theories in macroeconomics have severe difficulties in explaining this theoretically important outlier. We construct a dataset of 73 developed and developing countries to highlight the tight connection between price levels, product quality, and household wealth. We find that wealth per capita has a 20 percentage points higher explanatory power than income per capita — the key variable implied by standard theories. Analyzing more than 4000 product import categories, we find that Swiss unit values are more than twice as high as German unit values in the median product category. We then provide a theory linking these three forces. Wealth induces consumption shifts toward more expensive goods. As official price statistics tend to underestimate quality improvements, they overstate prices. In turn, higher product quality that comes with higher wealth inflates prices and thus contributes toward explaining price level differences across countries. [ABSTRACT FROM AUTHOR]

The aim of the article is expenditures analysis as a component of estimation of household financial condition. The results of the study were obtained according to the State Statistics Service of Ukraine on household expenditures for 2010-2020. In the process, the analysis was used as a method of theoretical knowledge of phenomena. Comparisons and measurements are used as empirical methods for the study. The existing approaches of domestic scientists and the methodology of the State Statistics Service of Ukraine on the nature and classification of household expenditures are analyzed. The Engel coefficient is proposed as an indicator of the estimation of the financial condition of the household and its value is calculated. Törnqvist functions for domestic households are built based on data on the composition and structure of expenditures. Engel's law and L. Törnqvist's functions allowed us to extrapolate to the sphere of household finance the conclusion that despite the increase in expenditures in absolute terms by more than three times, the financial condition of domestic households has not improved significantly. Construction of a linear function of the relationship between household food expenditures and factors of internal and external factors influencing their size; calculation of the direction and strength of their interaction through indicators of elasticity, correlation, and variance opens up prospects for further research in this area of financial science. [ABSTRACT FROM AUTHOR]

In studying individual consumption behavior, an important issue is the analysis of the relation between commodity expenditure and income. The subject of this paper is the analysis of clothing, footwear and housing consumption of households in Bosnia and Herzegovina. The aim of this paper is to quantify the impact of income on household expenditure for clothing, footwear and housing, with a focus on examining the validity of Second Engel's law in Bosnia and Herzegovina. Empirical research is based on the econometric modeling of Engel curves applying single equation modeling, using microdata from the Household Budget Surveys in Bosnia and Herzegovina, which are available for four years (2004, 2007, 2011, 2015). The surveys were carried out using the uniform methodology developed by the Statistical Office of the European Union (EUROSTAT). In order to achieve the research objective, six functional forms of Engel curves have been formulated and estimated. The intensity of the impact of income on relative changes in consumption was measured using income elasticities. Based on the estimated parameters and income elasticities derived from them, the hypothesis of unit elasticity of demand for the mentioned product groups in relation to household income was tested. Empirically estimated values of elasticities imply that the validity of the Second Engel's law in Bosnia and Herzegovina was partially confirmed: while clothing and footwear expenditures became elastic over time, expenditures for housing are inelastic in observed years. By comparing the estimated elasticities for different years in which the survey was conducted, it was revealed whether there were significant changes in the preferences of households in Bosnia and Herzegovina in the observed period. [ABSTRACT FROM AUTHOR]