Recomposition and levelling of consumption expenditures across four economic shocks in Russia, 1994–2014
The authors examine the changes in the level and composition of consumption expenditures and their associations with household per capita incomes across the four different economic shocks that Russia has experienced since 1994. Data were collected from a nationally representative annual panel survey of households between 1994 and 2014, supplemented by the Federal State Statistics Service source. Four hypotheses on the relationship between per capita income and consumption, the composition of cutbacks, a levelling of expenditures among income groups, and the stability of the pattern of consumer response to economic shocks are proposed. The data demonstrate that consumption expenditures on food, non-food, and services decreased together with per capita income during the four economic shocks. Only a few examples of significant smoothing effects were found. All income groups recomposed their expenditures to maintain consumption of necessities. The high-income group reduced a higher proportion of expenditures on food and services, implying that economic shocks produce a temporary levelling effect on the living standards of different income groups. A relatively stable pattern of consumer responses to economic shocks was revealed, despite these shocks’ divergence; this pattern implies a temporary economization and simplification of expenditures with a fast return to pre-crisis spending once the crisis is over.