Consumption Basket Research Articles

Collective bargaining as a tool for real wage increases

Over the past three years, the cumulative Consumer Price Index in Bulgaria has reached nearly 35%, while inflation in the small consumer basket rose even more. Low and middle-income earners spend an ever-increasing proportion of their income on essential goods, which have risen significantly in price. Against this background, the trade unions in Bulgaria, through collective bargaining and negotiations at national level, have taken a number of actions. These have led to accelerated income growth that has largely offset the increase in the cost of living and prevented a loss of real purchasing power in the medium term. In Bulgaria, the presence of a collective agreement guarantees that the wage is at least 14% higher than in a situation in which there is none. The past inflationary crisis provides solid empirical information about the role of trade unions in the conditions of the imperfect commodity and labour markets in which the national economy is situated. Taking manufacturing as a focus, the author concludes that the number of challenges the industry has cannot be faced without an enhanced role for human capital.

Poverty reduction as a factor of ensuring food security in Kazakhstan

Object: One of the key factors of economic security is the economic availability of food. This directly affects the problem of poverty reduction. Today, in Kazakhstan, the decline in real incomes of the population threatens the possibility of meeting the need for high-quality nutrition of citizens. The purpose of the study is to assess the level of poverty in Kazakhstan and develop measures to reduce it.Methods: The research methods were: systematic, the method of economic and statistical data processing, expert evaluation, the method of multidimensional comparative analysis of the level of poverty in the context of the regions of Kazakhstan and the republic as a whole.Findings: It is revealed that Kazakhstan ranks 32nd in the ranking of 113 countries in the world on food security. This is largely determined by the decrease in the availability of food products as a result of the lagging income of the population from the increase in food prices. The decrease in the economic availability of food occurs as a result of the increase in poverty indicators. The methodology for assessing poverty based on the consumer basket does not reflect the real picture and needs to be adjusted. The underestimation of the subsistence minimum directly determines the amount of social payments from the state budget for vulnerable segments of the population, which further aggravates the growth of the number of poor.Conclusions: Based on the analysis, a number of recommendations aimed at combating poverty, including organizational, legislative and financial instruments, are presented. In particular, it is proposed to revise the methodology for assessing the consumer basket; set the poverty line by the subsistence minimum, as is customary in most countries and recommended by international experts; develop state programs to promote youth employment; increase the responsibility of local executive bodies for the implementation of employment programs and the development of regional employment centers.

Effective salary policy as a component of the development strategy

The inefficient distribution of income in society creates a number of problems, the main of which are the following: approved social standards are at least two times lower than the actual value of the minimum consumer basket, half of the Pension Fund's income is formed at the expense of subsidies, and half of the country's households need subsidies to pay for housing and communal services. As a result, there is no solvent demand for goods and services on the market, which slows down the socio-economic development of the state. The need for radical improvement of the principles of income distribution in society determines the relevance of the research topic. The task is to determine the legal means of effective distribution of income in order to accelerate the socio-economic development of the state. The drivers of economic growth based on wages and/or profits of enterprises are analyzed. However, none of the possibilities will be realized in the absence of a stable or at least predictable exchange rate of the hryvnia, a progressive income tax system and fair market prices. The socialist ideology of the connection of wages with labor productivity, which is equated with labor intensity, does not allow to implement the optimal distribution of incomes and restrains the socio-economic development of the state. Labor productivity is determined by the level of production equipment and technology, the progressiveness of technological processes, the use of innovative materials, the introduction of patents and know-how, etc., which provides for higher qualification of personnel and higher wages and determines the direction of using the received profits and attracting investments. The regulator of the use of profits is the tax system and progressive tax rates. Income distribution in society should be determined by acceptable social standards and ensured by the application of progressive personal income tax rates. Amendments to the Tax Code of Ukraine have been proposed, which will ensure the solution of the set tasks

Study of the effect of drought on the morphophysiological characteristics of broad bean (Vicia faba L.) specimens introduced from ICARDA under irrigated conditions of Absheron

The global climate change occurring in the modern world has caused the deterioration of the ecological situation on Earth. Stress factors such as drought can affect the growth and development and productivity of many valuable agricultural plants and lead to their destruction. Food legumes are considered to be priority crops for the modern era and are the main component of the population's consumption basket, and are considered to be one of the main alternative foods in meeting daily protein needs. The minimum use of animal protein, the widespread use of legumes rich in plant protein to replace it, leads to a decrease in the demand for animal husbandry, and the replacement of pastures with arable land. This, in turn, actualizes the expansion of the cultivated areas of food legumes along with other agricultural crops in the country. The broad bean is the cheapest food crop in the agrarian field. The water retention capacity of leaves in broad bean specimens was determined using the "Turgoromer-1" device, and the temperature change occurring due to the transpiration in the leaves was determined with an infrared thermometer. As a result of the measurements, droughttolerant varieties were identified, and Rebeya 40; FLIP17-010FB; FLIP17-008FB; FLIP17-032FB; FLIP16-202; FLIP17-055FB; FLIP17-033 FB; FLIP16-200; Misir-3 were recommended for the Absheron region as prospective specimens. In the studied specimens of the international nurseries, positive reliable correlations were detected between the first pod height and the plant height (r=0.854*), grain number per plant and pod number per plant (r=0.982**), pod length and the grain number per plant (r=0.986**), grain weight per plant and plant height (r=0.939*), grain weight per plant and grain number per plant (r = 0.886*), grain weight per plant and pod length (r=0.885*), grain yield and plant height (r=0.950*), grain yield and grain number per plant (r=0.947*) and grain weight (r=0.885*), 100-grain weight and pod number (r=0.894*). Keywords: Broad bean, specimen, introduction, drought, water retention capacity

Analysis of the Relationship between Names and Quality of Various Groups of Food Products

Introduction: The analysis of food names is an important task aimed at solving two problems, namely, determining the relationship between research results and individual words used and, as a result, obtaining a reliable, from the point of view of food quality, classification within subgroups. Objective: To analyze the relationship between the names of food products and their micro- and macronutrient composition. Materials and methods: The research object was the whole aggregate of the results of testing bakery products, processed meat products, and milk carried out within the framework of the Federal Project on Public Health Promotion in 2020–2021 by laboratories of the Russian Federal Service for Surveillance on Consumer Rights Protection and Human Welfare (Rospotrebnadzor). We applied such linguistic analysis methods as tokenization, noise word removal, stemming, and N-gram analysis. Results: For bakery products, we selected words and their parts enabling us to divide samples into previously obtained groups with different contents of sodium, protein, and fat. For processed meat products, classified by the sodium and fat contents, we also compiled a list of words allowing a reverse classification by name. For fluid milk, we obtained a negative result since the products with the established low calcium content did not differ from other groups in terms of names and their parts. Conclusions: The analysis of food names has demonstrated the potential for classifying foods by their names in order to assess their likely micro- and macronutrient composition. It is necessary to conduct a number of further studies aimed at expanding the list of analyzed product groups, especially those included in the consumer basket.

Progressive income taxation and consumption baskets of rich and poor

In this paper, I analyze the implications of differences in consumption baskets across income groups to evaluate the effects of redistributive taxation on efficiency and inequality. To this end, I develop a static multi-sector general equilibrium model incorporating a parametric tax function, non-homothetic consumption preferences, and endogenous labor supply, with varying compositions of skilled and unskilled labor in production across sectors. A calibrated version of the model captures the cross-sectional differences in the compositions of households' consumption baskets in the United States. I find that considering the differences in consumption baskets between high- and low-income households leads to a lower optimal choice of income tax progressivity compared to the conventional approach that ignores this feature of the data.

Sugar market in the Republic of Kazakhstan: priorities, optimality criteria

Relevance – one of the main directions of sustainable growth of economy of Kazakhstan is providing the country's population with affordable and high-quality food products. The goal is to show the current situation, the problems of the food market in the republic, in particular sugar industry, products of which are a component of the consumer basket. Methods – statistical and analytical research techniques, studying the works of agricultural economists on the problems of development of agro-industrial complex. Results – the study analyzed the dynamics of changes in the main indicators affecting the volume of sugar beet production, and presented its sown area for 2017-2022. The factors influencing the gross harvest of this crop and the level of sugar production have been identified. Measures have been proposed to improve the situation on the food market and accelerate the development of sugar subcomplex: expansion of sown areas in beetgrowing regions, including sulfur; increasing productivity through the use of high-quality seeds and moisture-saving technologies; strengthening the raw material base; attracting investment in sugar sector; state support in the form of subsidies and preferential loans to agricultural producers; modernization of material and technical resources of sugar factories, in particular irrigation systems, introduction of modern innovative technological schemes for breeding work and seed production. Conclusions – sugar industry, especially its beet component, requires close attention from the perspective of strategic management, improvement and increasing the stability of its functioning. To stabilize and protect the domestic market, it is necessary to study the issues of establishing a minimum level of prices for the import of white sugar and low retail (marginal) prices. Recommendations for expanding the cultivation of sugar beets will help reduce import dependence and saturate the domestic market.

Electricity Market Dynamics and Regional Interdependence in the Face of Pandemic Restrictions and the Russian–Ukrainian Conflict

Electricity constitutes a significant part of the consumption basket of European households and companies. Since energy products are essential components of almost all products and services, any change in energy prices directly impacts the general price level of those products and services. Therefore, this study aims to conduct a comprehensive analysis of power exchange data between 2019 and 2022. For the analysis, we examined the data of 15 countries. In the research, we compared electricity prices in European power exchanges using the Jaccard similarity index and the overlap coefficient, using the DAM hourly prices between 1 January 2019 and 31 December 2022. We transformed the time series into networks using the visibility graph procedure and compared the networks of the studied countries using the two comparison methods with the degree distribution functions. Our aim is to examine how the market anomalies caused by the COVID-19 pandemic and the Russian–Ukrainian conflict affect European electricity markets and how quickly the repercussions spread across the studied countries’ exchanges, and whether they show persistent or anti-persistent characteristics. The results support that similar market effects significantly influence the pattern of price changes among the countries. The methods forming the basis of the research can provide significant assistance in analyzing market trends and contribute to a better understanding of market processes.

Inflation with Covid Consumption Baskets

Inflation with Covid Consumption Baskets

The cost of living in early modern cities: a study on eighteenth-century northern Italy

AbstractThis study estimates the cost of living in three cities – Florence, Bologna and Milan – in eighteenth-century northern Italy. Although they do not allow an understanding of the differences between social groups or seasonal consumption patterns, the calculation of living costs and the implied modelling have a twofold aim. First, they allow the calculation of real wages, which are obtained by dividing nominal wages by the cost of a consumption basket; therefore, broadly, they allow the Italian case to be put into great debates of economic history, such as the one on the Little Divergence between northern and southern Europe at the end of the early modern period. In this regard, we will show that the existing calculations used for this purpose have many criticalities, and we will solve them. Second, determining the cost of consumption baskets allows us to observe the role played by urban public institutions in mediating between the market and consumers, with relevant effects on price trends and, therefore, on the purchasing power of the urban population.

Biofortification in Ethiopia: Opportunities and Challenges.

Children younger than 5 years and women of reproductive age often suffer from micronutrient deficiencies. Biofortification, which involves enriching staple crops with micronutrients, is a nutritional intervention focused on addressing micronutrient deficiencies. It is equitable, sustainable, and costs less than other nutritional interventions. This study investigates biofortification in Ethiopia, considering 6 globally biofortified crops, 5 of which are currently being biofortified in Ethiopia. However, only 2 of these crops are important in the consumption baskets of most Ethiopians. Therefore, efforts to mainstream biofortification should begin with studies to identify crops that have larger impacts in reducing local micronutrient deficiencies and their cost-effectiveness. Literature was searched between July and December 2021 using Google Scholar to provide insights into the state of biofortification in Ethiopia. Key-informant interviews were conducted to gain insights into the state of biofortification in Ethiopia and to identify bottlenecks for scaling up the production and consumption of biofortified foods. Furthermore, Annual Agriculture Sample Survey and 2015/16 Ethiopian Household Consumption and Expenditure Survey data were used to describe the area under production of biofortifiable crops and their importance in total consumption, respectively. Mainstreaming biofortification in Ethiopia faces several challenges. Policy documents appear to be inconsistent, regressive, and vague regarding biofortification. Critically, there is no specific institution to oversee and/or coordinate biofortification-related activities. Overall, the success of biofortification depends upon a strong coordination body with clear mandates from detailed policies; adequate funding for research and development; and robust monitoring and evaluation of the identified production, adoption, and consumption issues.

Degree of persistence of energy mix diversification of the US states: fresh evidence using LM unit root tests with sharp or smooth breaks and cross-sectional dependence.

Diversification of energy mix is related to the heterogeneity of contributions of energy sources in the energy consumption basket of nations. Its persistent degree reveals the efficiency of energy-related policies or shocks to diversify the contributions of energy sources in the energy mix. For the first time, the current study measures the diversification level of energy mix of the USA and its 51 states and examines its stochastic behavior to analyze its degree of persistence. To this end, we calculated the diversification of energy mix using Herfindahl-Hirschman index over the period 1960-2020. Then, we applied two novel versions of LM unit root tests that can incorporate sharp or smooth breaks and common factors (to control for cross-sectional dependence) to quantify the stochastic behavior of time series of Herfindahl-Hirschman index. Our results indicate (i) the energy mix of most of the US states diversified over the period. (ii) Most parts of diversification of energy mix occurred from mid of the 1970s to first half of the 1990s. (iii) Sharp breaks of deterministic part (intercept and slope of the linear trend) of Herfindahl-Hirschman indexes occurred coinciding with oil prices shocks in two decades 1970 and 1980. (iv) The Herfindahl-Hirschman index of most of states display stationary behavior, which indicate the pro-diversification policies, e.g., which are implemented to develop renewable energy sources, have transitory effects and policymakers should implement long-horizon policies to achieve their targeted level of diversification.

Measuring the Elasticity of Demand for the Consumer Basket Components in Jordan

This study aims at measuring the income elasticity of demand based on a survey of the household income and expenditure in the Jordanian economy for the period 2017-2018. And in order to measure the income elasticity of demand, the researchers used the simple linear model However, the researchers anticipated that the increase in the household income would lead to an increase in commodities consumption: in return for the possibility of reducing the consumption, by increasing the price of the commodity. The study reached a set of results, by measuring the income elasticity of demand for 77 types of commodities and services: such as the convergence between the consumer response to the movement of each income and price among the commodities in the Jordanian economy and in other countries, where fresh fish is on the list of luxury commodities among fish and meat. What explains this is the shortage of this commodity offered quantities in the Jordanian market and its high prices. Thus, the presence of very low-income elasticity of ’garlic’ commodity at the level (0.092), which indicates that this commodity cannot be abandoned in case of low income.

The correlation of the minimum wage in the economy with the minimum consumption basket in Romania

The official statistics - the National Institute of Statistics (NIS) - has, among other activities, the calculation of the minimum consumption basket, the monthly update of its value with the consumer price index. NIS uses the European methodology to determine the poverty line. The minimum monthly consumption basket was introduced in Romania by "Government Emergency Ordinance no. 217 of November 24, 2000 regarding the approval of the minimum monthly consumption basket", for a household of average size considered to be 2,804 people, including all expenses necessary for living in a month through the purchase of: (1) food products, (2) non-food products and (3) services. In accordance with O.U.G. no. 217/2000 the minimum monthly consumption basket is the basis of the foundation of the minimum basic salary on the economy, the salary policy and other policies in the social field. The increase in the minimum wage was done without any objective criteria on the basis of which the increases should be made. The absence of such criteria creates a high degree of unpredictability for the business environment, companies being put in the position of not being able to estimate what the evolution of salary costs will be, which has a negative impact especially in the sectors of activity characterized by a high weight of minimum wage contracts.

The Energy Crisis and Its Real Impact on the Inflation Rate

Abstract In the year 2022, inflation has become a global phenomenon. According to the World Bank, inflation affected developed countries (100%) and emerging markets/developing economies (87%). About two-thirds of advanced economies and just over half of emerging markets exceeded forecast inflation for 2021. This drove interest rates higher and helped tighten monetary conditions. As a result of the increasing costs of loans, this fact can lead to financial crises. The main causes on account of which the political factor justifies the increase in inflation refer to the war in Ukraine and the energy crisis. However, the direct effect of energy prices on inflation is low, as the share of energy costs in the consumption basket is low, according to the calculation formula used at the European level. Moreover, the population’s perception reinforces this aspect, considering the fact that the prices of the most common food products in the daily basket have doubled or even tripled. Even in these conditions, energy companies continued to make high profits, which is why the need to overtax them at the European level arose. Although the energy crisis is recognized as one of the main causes of inflation, despite the importance of this topic, academic studies have neglected to analyze the real impact on inflation of energy shocks resulting from price increases. In such a context, the present study starts from the premise that the current energy crisis cannot be considered to be the only determining cause of the growth of the inflationary phenomenon. This could be the result of macroeconomic policies perpetuated over several decades, without a positive echo in the economy.

Reason for Opposite Movement of GDP Deflator Inflation with CPI Inflation in Korea

Korea's CPI inflation reached 6.3% in Jul. 2022, the fastest increase since Nov. 1998. However, the quarterly GDP deflator inflation for the third quarter of 2022 was only 0.2% over the same quarter of 2021. The differences between Korea's CPI and GDP deflator are the way of measuring price and the set of goods and services they cover. The goods and services in the investment, government expenditures, export, and import are not in the consumer's basket but in GDP. Moreover, imported goods and services contribute to the GDP negatively. If the import price increases when other things stand still, the GDP deflator decreases. In contrast, the cost of consumer baskets generally increases. Therefore, the import price changes only can induce the opposite moves of the CPI and the GDP deflator inflations.

Short and Long Run Effects of Monetary Policy on Food Inflation: A Study of Pakistan

Food plays a major role in the consumption basket of developing countries such as Pakistan, with a significant portion of the insufficient income of poor individuals spending on food. Therefore, higher food inflation severely affects the purchasing power of poor people. This study is designed to estimate the short and long-run impacts of monetary policy on food inflation in Pakistan. For this purpose, time series data from September 2005 to October 2020 was used through the Autoregressive Distributed Lag (ARDL) model. The findings indicate that food inflation can become stable by restrictive monetary policy in both the short and long run. The results show that the short-run shocks can be adjusted at the speed of 13.9% per month. To tackle food inflation, a balanced monetary policy is suggested. On the other hand, a fiscal policy providing subsidized food items to people can also be implemented to tackle food inflation in Pakistan.

COVID-19 inflation weights in the UK and Germany

The COVID-19 pandemic altered consumption patterns significantly in a short period of time. However, official inflation statistics take time to reflect changes in the weights of the CPI consumption basket. Using credit card data for the UK and Germany, we document how consumption patterns changed and quantify the resulting inflation bias. We find that consumers experienced a higher level of inflation at the beginning of the pandemic than what a fixed-weight inflation (or the official-weight) index suggests and lower inflation thereafter. We also show that weights can differ among age groups and in-person vs. online spenders. These differences affect the purchasing power of the population heterogeneously. We conclude that CPI inflation indexes based on frequently updated weights can provide useful inputs to assess changes in the cost of living, including across segments of the population. If shifts in consumption patterns prove persistent, these indexes can help determine the need to introduce new weights and inform monetary policy and the design of support policies for the more vulnerable.

Social Protection Through Adequate Minimum Wage in the States of the European Union

The need to improve living and working conditions in the European Union, but also the idea of ensuring economic and social progress within it, required that the minimum income of each worker could be determined transparently and predictably by each member state, in accordance with social reality and in accordance with national legislation. Directive 2.041/2022 on the adequate minimum wage in the EU, states that from the moment of its entry into force (October 2022), member states have two years to transpose the provisions into domestic legislation. Not all EU countries will have the same adequate minimum income. Each state will establish its level according to social and economic conditions, purchasing power, productivity level and the evolution of macroeconomic indicators at the national level, but having as a guide precisely the provisions of the European directive and the principles it includes. Thus, countries that already have a minimum wage per economy are committed to changing its level according to a formula that ensures a decent living, is consistent with the inflation rate and can cover the minimum shopping basket for various necessary goods and services. Member States are recommended to update their minimum wages at least every two years, and in countries using an automatic indexation mechanism, at least every four years. In order to correctly calculate this income, the directive recommends that member states take as a starting point the value of the consumption basket (as provided by national statistical reports), or set this income at 60% of the median salary or at 50% of the salary gross average per economy. For example, a consumption basket for a decent living can be composed of costs for: food, clothing and footwear, housing insurance, furnishing and maintenance, household products and personal hygiene, services, education and culture, health care, recreation and vacation, savings fund. Romania (with just over 600 euros) ranks among the last EU countries, in 20th place out of 22, just ahead of Hungary and Bulgaria, on a scale of this indicator between 2,387 euros in Luxembourg and 399 euros in Bulgaria. The EU directive will generate greater transparency, certainty, stability and predictability on the labor market, and in times of crisis it will become an anchor for vulnerable citizens from EU countries, implicitly also for those from Romania.
 
 Received: 05 May 2022 / Accepted: 15 May 2023 / Published: 20 May 2023

Social component as a factor and indicator of sustainable development of Ukrainian Polissia region

Official international organizations claim that existing notions about the relationship between a decrease in life expectancy and a reduction in population in affected regions are controversial and are a result of the impact of radioactive emissions from the Chornobyl explosion. However, despite the weak link between the level of radioactive contamination and population dynamics in the studied areas, the level of natural decline in rural population on radioactively contaminated land is significantly higher than in other territories. This indicates the need for further research in this direction. The aim of the study was to clarify the social basis for the implementation of balanced development in radioactively contaminated areas of Ukrainian Polissia. The article presents the results of a study on the role of the social component in the implementation of sustainable development in radioactively contaminated areas of Ukrainian Polissia, taking into account both long-term complex ecological, economic, and social challenges and the potential consequences of Russian military aggression. The methodology of the research is based on a systemic approach, which involves using both modern and classical scientific methods of research, including general scientific methods such as data analysis and synthesis; retrospective and comparative analysis for identifying causal relationships; analytical and synthetic methods for studying scientific and statistical data, archival materials, legislative and regulatory documents, among others; and mathematical methods for the mathematical processing of the obtained results. The research is based on the official statistical data provided by the main statistical departments in Volyn, Zhytomyr, Kyiv, Rivne, and Chernihiv regions. Existing trends and results of studies on the interrelation between radioecological and social components have been analyzed. The study examines social indicators of the quality of life of the inhabitants of Ukrainian Polissia region (total income, level of wages, structure of population expenditures, etc.), demographic indicators (population, gender-age structure and population growth/decline), employment rate, morbidity, and consumer basket for rural and urban settlements in the studied regions. It has been established that indicators of the social sphere in the region of Ukrainian Polissіa can serve as additional criteria for assessing the current socio-economic situation and its dynamics. It has been determined that the social factor is an integral component and at the same time a criterion for sustainable development of radioactively contaminated territories. The need for a series of measures aimed at increasing the effectiveness of the state policy on employment of the population and the vocational education system has been proven, taking into account the forecasts of the regional enterprises’ demand for certain skilled personnel by professions and specialties, as well as the list of the most in-demand and promising professions and specialties. The list of such professions is individual for each region