Savings Rates and Consumption Convergence in Regions: Spatial Analysis

Abstract

The savings rate reflects the preferences between current and future consumption. Sustainable development implies ensuring the same volume of consumption of the current and future generations. The purpose of the study is to measure the β-convergence of average consumption growth rates in the long term, taking into account spatial relationships on the Russia’s regions panel data from 2014 to 2019. We used Moran and Geary spatial correlation indices, econometric model with spatial lag, maximum likelihood method. The convergence of consumption in the regions and greater growth in weak regions, the positive impact of per capita cash income on the average growth rate of consumer spending in the regions is shown. We show the negative impact of the savings rate on the consumption average growth rate per capita and lack of influence of digitization variables. We also find spatial cooperation of consumption in the regions. The scientific novelty lies in measuring the spatial correlation and convergence of consumer spending in Russian regions. The main conclusions of the article can be used in scientific and practical activities in the implementation of the concept of sustainable development of regions based on an institutional approach, taking into account spatial differentiation.