ARMENIA’S RICH CONSUME 8 TIMES MORE THAN POOR
tert.am
09.10.12
According to the analyses of NSS of RA data on consumption of income
deciles, consumption of households in the highest decile in Armenia
is 8 times more than consumption of those in the lowest decile.
Notably, food consumption in the lowest deciles is 5 times lower than
in the highest decile, says a report entitled Prices and Vulnerability,
prepared and published in assistance with Oxfam GB in the scope of
“The food price monitoring” program.
Actual consumption of food items in various deciles does not comply
with the norms set by the Ministry of Healthcare of Armenia. In the
lowest decile, consumption is below all norms except for bread.
Consumption of meat in the lowest decile is lower than the norm by
more than 2kg, while in the 5th decile – by about 1.5kg. For the case
of fruits, the poorest decile should increase consumption 3 times,
while the medium decile – by 1.5-2 times. In the richest decile,
the norm is even exceeded.
By analyzing the 2009-2010 data, the authors came to the conclusion
that inflation affected all income groups in terms of quantities of
consumed food and its variety. If consumers kept their 2010 consumption
at 2009 actual levels, they would have to pay 14-18% more (depending
on the decile) for that.
Due to inflation, consumers preferred cheaper combinations. In all
deciles physical volumes of consumption decreased in 2010, however,
all deciles except the lowest had to spend more.
Consumption volumes decreased on average by 10.6% in the first four
deciles. First decile reduced consumption by about 14%, while the
10th decile – by 3.5%. As a result, the lowest decile paid for food in
2010 even 2% less than in the previous year, while the 10th decile –
13.6% more.
The authors compared 2011 inflation data with food consumption across
the deciles. If households kept the 2010 level of food consumption,
they would have to pay on average 20-25% more. I. e. if the same
consumer behaviour was continued during 2011, inflation had even
worse social impact.
Thus, inflation impact on consumer behaviour varies across deciles.
Increase in food prices is a burden for all households. Some
households manage to maintain the same level and structure of
consumption by spending more on food. Meanwhile some others adjust
their consumption basket by substituting expensive items with cheaper
ones and compromising the quality. The poorest households do not
have alternatives for substituting food items consumed and have to
reduce consumption. By reducing consumption that was already below
the norms of the minimum consumption basket many households fall
into malnutrition.