Changes in the Consumption Structure of Russian Households Under the Impact of an Atypical Crisis in 2022

Households are the most susceptible to external shocks among economic agents. A considerable body of research has been conducted to assess the impact of crises on household living standards, inequality, and aggregate consumption. However, the aspect of consumption structure has received less attention. This paper examines the impact of the atypical crisis of 2022 on the structure of household consumption in Russia. The structure of household consumption encompasses five categories: expenditures on food at home and outside the home, alcohol, non-food goods and services. For the purposes of quantitative analysis, data from the Russian Longitudinal Monitoring Survey of the HSE were utilised. In order to ensure the accuracy of the estimates, households were categorised into six distinct clusters, based on the employment sector of the head of household. In order to analyse the data, a number of statistical tests were employed, including the t-test and the Kolmogorov-Smirnov test. In addition, a number of regression models were used, including random effects, fixed effects, the Tobit model with random effects, and a non-parametric estimator for panel data. The principal conclusion of this paper is that the quantitative impact of the crisis (reallocation of consumer spending and its shares) is considerably more pronounced than the qualitative change in consumption habits. This indicates a certain inertia of Russian households in consumer behaviour, as well as reluctance to significantly alter the structure of consumption. Furthermore, there is a narrowing of the consumer basket in favour of expenditures on food at home, the high share of which in the consumption structure indicates low household income. A quadratic dependence on income and age of the household head was tested as a robustness check. The results indicated the stability of the obtained results in the modelling. Additionally, trend break points were calculated for cases of quadratic dependence in income and age of the household head, which shed light on the consumption behaviour of households. Of particular importance for Russian policy management is the identification of clusters of households that are the most affected by the atypical crisis of 2022. The results indicate that the least affected households are those whose heads are employed in agriculture, the defence industry, and the business sector. In contrast, the most affected households are those headed by pensioners and those whose heads are employed in the real sector and the public sector.