There is a very high level of social inequality in the Russian market

18 may 2017 | Nezavisimaya Gazeta

The make-up of consumer spending on services changes significantly depending on a person's income; that's the conclusion drawn by Analytical Center experts. "At the same time, the share of paid services in total consumer spending in Russia is less than in the developed nations and in a number of emerging economies," Leonid Grigoriev, an adviser to the Head of the Analytical Center, told an Nezavisimaya Gazeta correspondent.

Leonid Grigoriev
Leonid Grigoriev
Chief Adviser to Head of the Analytical Center

"A lot of the paid services that we have in the market today originally emerged in Russia in the 1990s when they were targeted almost exclusively at the affluent and the market is still characterized by a very high level of social inequality," the analyst believes.

The study notes that the consumption of all paid services by the richest 10% of the population in the first three quarters of 2016 was 11 times that of the poorest 10 % of the Russian population in the same period. The affluent can afford a much broader range of paid services that go far beyond the unavoidable utilities, communication and transport. And even when it comes to these basic services, the rich families normally pay more for them as well. 

"Thus, the richest 10 % of the population ended up paying 5 times more for utilities than the poorest 10 %. The rich normally pay at least 2 times more for electricity and 5 times more for heat and water. The only exception is natural gas where the poorer households pay 12 % more than the more affluent ones," the experts write.

For other types of services the gap between the rich and the poor is even greater. When it comes to medical services the richest 10 % of the population spent 60 times as much on them as the poorest 10 %, with regards to culture and entertainment services the difference has reached 80 times and for health, fitness, and resort services it has reached 200 times.

The Nezavisimaya Gazeta notes that in Russia there has emerged an unequal financial access to some basic services that the health and future of every family depends on.       

For more see the bulletin Household Demand for Paid Services.