Contents
We live in a society where, in the ironic remark of the British sociologist Zygmunt Bauman, ‘the road to happiness travels through shopping; the sum total of the nation’s shopping activity is the prime and least fallible measure of society’s happiness.’ What we acquire has become the easiest means of self-expression and identity formation.
Households play an important role in such an economy: they are, after all, the final consumers of most goods and services, and their expenditure forms a significant share of GDP. Understanding the following is therefore important for a country’s sustainable economic development:
- how individuals and households make economic decisions – on purchases, savings or work;
- how those decisions are affected by income dynamics, the macroeconomic situation and government policy (whether economic, fiscal or social).
Yet, for a long time, the study of the economic behaviour of the population remained on the periphery of both economic and sociological theory (links in Russian).
Generalised models and unrealistic assumptions
Classical economics treated the subject of consumption as secondary to the overall structure of the economy, production and the distribution of resources. In macroeconomic models, consumption – the acquisition of goods (products and services) through market exchange – became part of theories of economic growth. For instance, in the model of Robert Solow (Nobel laureate, 1987), households allocated income between consumption and savings, with the savings rate set externally – exogenously – and therefore independent of household decisions.
John Maynard Keynes viewed consumer expenditure as comprising an autonomous component and a component that varied with income growth.
The Ramsey–Cass–Koopmans model, an early intertemporal choice framework, sought to explain the savings rate endogenously – through factors within the system itself. Specifically, households were assumed to balance the desire to consume now against the desire to consume in the future (i.e. to save), depending on expectations regarding income dynamics and interest rates. However, this relied on rather unrealistic assumptions: that consumers live infinitely and that their income does not depend on age.
At the micro level, it seemed sufficient to assume that a rational individual, possessing all necessary information, makes purchasing decisions to maximise their own benefit within budget constraints. The latter were determined by income, which consisted of wages and capital income. However, none of these models addressed how consumer preferences are formed. Moreover, macroeconomic models relied on the notion of a ‘representative’ household, ignoring differences in the structure of consumption.
Difficulties also arose when moving from individual consumer decisions to the analysis of aggregate demand, which hindered the empirical testing of theoretical assumptions.
Evolution of approaches
Economists began to pay greater attention to households’ consumer and financial behaviour in the second half of the twentieth century. It is no accident that the works of many Nobel laureates introduced new approaches to studying the economic behaviour of households. Systematic discrepancies between the predictions of models and real-world data on consumption and financial behaviour, as well as contradictions between micro- and macroeconomic studies, prompted scholars to build greater complexity into their original models.
The development of the Almost Ideal Demand System (AIDS) by the British economists Angus Deaton (Nobel laureate, 2015) and John Muellbauer made a major contribution to the macroeconomic analysis of consumer demand. This econometric model relates the demand for a specific good or service to its price relative to other goods. The method the authors proposed for aggregating individual demand curves captures economies of scale and household heterogeneity. One of the system’s principal merits was its relative simplicity and suitability for empirical estimation. Over time, the model became more complex and began to account for the demand for services, including non-market ones.
More sophisticated intertemporal choice models were being developed at the macro level. These now took into account the consumer’s finite lifespan, as well as changes in income and sources of earnings at different stages of life. They built on Milton Friedman’s permanent income hypothesis (Nobel laureate, 1976) and Franco Modigliani’s life-cycle hypothesis (Nobel laureate, 1985). Both approaches rest on the idea that people, anticipating a fall in income after retirement, direct part of their income towards savings during their younger years in order to maintain their accustomed level of consumption in old age. These ideas underpin a large body of empirical research on differences in the consumer and savings behaviour of people of different ages, as well as on the impact of population ageing on the dynamics of consumption and savings.
To improve the ability of economic theory to predict actual consumer behaviour, researchers began to incorporate constraints into their models: incomplete information, information search costs (link in Russian), and asymmetric information (a situation where the seller and the buyer possess differing amounts of information). More recent work has brought online commerce into the analysis and has begun to examine how the digital economy is reshaping consumer and financial behaviour. On the one hand, it reduces information search costs; on the other, it exacerbates information overload and creates new forms of asymmetry.
The contribution of behavioural economics
Behavioural economics has made a major contribution to understanding how context affects economic decisions. Its proponents make active use of insights from cognitive and social psychology and often rely on experiments.
The founders of the field – Daniel Kahneman (Nobel laureate, 2002) and Amos Tversky – used prospect theory to challenge the neoclassical assumption that individuals can consistently rank their preferences. They demonstrated that people treat potential gains and losses differently and exert greater effort to avoid losses.
Richard Thaler (Nobel laureate, 2017) introduced the concept of ‘mental accounting’, showing that people’s attitude towards money depends on its source and the purposes for which it is spent. He also discovered the ‘endowment effect’ (link in Russian) – the tendency for people to value things they already own more highly than things they might acquire. Thaler’s other findings (link in Russian) on economic decision-making led to new tools for ‘nudging’ people towards certain actions – for example, automatic enrolment in pension schemes.
Several strands of economic thought have called into question another fundamental assumption of the neoclassical model – the idea that an individual’s preferences are fixed in advance and do not change. It turned out that preferences are in fact shaped by experience, social norms, and political and social structures.
In Accounting for Tastes, Gary Becker (Nobel laureate, 1992) insisted on the need to extend this list to include personal and social capital: individual habits and the influence of one’s social environment. For instance, a person who has listened to a great deal of classical music in the past is more likely to prefer a concert at the philharmonic to a rock festival. Similarly, the choice of a book or a restaurant is often determined by a friend’s recommendation. George Akerlof (Nobel laureate, 2001) and his colleague Rachel Kranton, in their book Identity Economics, proposed that social identity and behavioural norms should also be taken into account. This implies that the social environment is not merely capable of shaping preferences, as in Becker’s framework, but also of setting the rules of the game. For example, someone who does not like classical music, yet knows it is listened to by the ‘high society’ to which they aspire to belong, may be prompted to attend classical music concerts in order to sustain that identity.
The idea that economic decisions are context-dependent and socially embedded was one that sociologists had long taken for granted. For economists, it proved revolutionary.
The ‘turns’ of sociological thought
Nevertheless, disciplinary boundaries have not disappeared. Economists still largely view consumption as an act of market acquisition of goods by rational individuals or households. Sociologists, by contrast, are more interested in how and why people use goods in their everyday lives, and how consumption relates to power, control, solidarity and social relations.
The evolution of sociological approaches to the study of consumption can be roughly divided into several stages, or ‘turns’.
19th – early 20th century: the classical period. The classics of sociology initially followed the political economists in treating consumption as a peripheral sphere derived from the production of goods. Later, however, they began to pay it greater attention. Georg Simmel regarded consumption as a result of the dual human desire for self-expression, and for connection with and imitation of the group. Thorstein Veblen, the author of the theory of conspicuous consumption, believed that people’s consumer preferences are socially determined and serve to display wealth and reinforce social inequality. Max Weber argued that consumption is an independent factor and a derivative of social differentiation, which is grounded in normatively conditioned differences in lifestyle. He also introduced the concept of ‘budgetary units’, according to which consumption is managed not so much by individuals as by collectives with a common budget, including households, whose logic may be governed by non-economic objectives.
1930s–1960s: the critical period. This was a period of rather critical attitudes towards consumption, most vividly expressed by representatives of the Frankfurt School, who viewed it as a form of social control exercised by the culture industry.
1970s–1980s: the cultural turn. The cultural turn of the 1970s altered the critical view of consumption: it came to be perceived as a positive phenomenon. The consumer began to be seen as possessing agency – the capacity to choose a goal and the means of achieving it – and consumption itself as a manifestation of individual freedom and choice. During these same years, sociologists, like economists, turned their attention to the role of emotions and desires in consumer behaviour.
In the 1980s, the American sociologist Viviana Zelizer introduced the concept of ‘sociological accounting’, which complemented Thaler’s ‘mental accounting’ and underscored the role of social norms in the earmarking of money.
1980s–1990s: the material turn. The material turn shifted the focus back from symbolic to material aspects of consumption, making it possible to reconnect consumption with the production of goods. Scholars in this tradition also studied (link in Russian) how objects, as they are used, become endowed with personal meanings, helping to provide comfort and facilitate social relations. The goals of consumption began to be interpreted more broadly, encompassing participation, solidarity and the maintenance of bonds between people. This approach offers a different perspective on consumption within the household, where a significant share of expenditure is linked to sustaining a sense of community and creating collective memories.
1990s–2000s: the practice turn. During this period, sociologists also addressed the issue of ‘collective consumption’. They examined how the commercialisation of services once provided by the family or the state changes the way people access those services. Researchers studied how the state, the market and the family substitute for one another in the creation of goods, and how consumer experience is linked to where and by whom these goods are produced.
This practice turn was also associated with an interest in forms of consumption that are not reducible to individual choice or market purchases. For example, the focus expanded to everyday consumption – from domestic chores such as cleaning, cooking and watching television to intergenerational exchange and collective consumption. Sociologists began to analyse recurring routines, viewing tastes and consumer practices simultaneously as a reflection of the social structure and as a mechanism for its reproduction. Practice-oriented researchers examine various ways of delivering a good and how they affect consumption. This makes it possible, for instance, to investigate emerging phenomena such as online consumption and new forms of eating out.
New themes (link in Russian) emerging in recent decades – sustainable consumption, digitalisation, the sharing economy and platform economy, non-monetary forms of consumption (time budgets), and non-standard consumer practices – are now being studied by both economists and sociologists. Interdisciplinary synthesis is increasingly needed to explain why people respond differently to the same stimuli.
Research in Russia: the data issue
In Russia, consumption research is relatively new. On the one hand, this allows Russian researchers to draw on the knowledge and the theoretical and methodological approaches already accumulated internationally. On the other, an enormous shortage of empirical data is holding back the development of domestic research.
At the macro level, the main source of information on household consumption is the system of national accounts (SNA). At the micro level, the longest-running observations of consumer expenditure are available from the Household Budget Survey (HBS) conducted by Rosstat since 1992, and from the Russia Longitudinal Monitoring Survey (RLMS) carried out by HSE University using a consistent methodology since 1994.
Rosstat’s surveys – not only the HBS but also others that have appeared since the 2010s – are the largest sample surveys and contain detailed information on incomes, economic behaviour and consumption of the population. However, the choice of indicators in those is driven more by the needs of statistical accounting than by research theories. These data make it possible to analyse dynamics and structural changes – for example, how the level or structure of household consumption is changing, or how consumption differs between urban and rural areas, or between households with children and those with pensioners – but they do not help to explain the nature of such differences.
To reduce the shortage of theoretically grounded empirical data, HSE University launched a major project on the economic behaviour of households in 2023. It involves the regular collection of quantitative and qualitative data: each year, 2–3 representative surveys of the adult population are conducted (at least 6,000 respondents aged 18 and over in each wave), along with 2–3 online surveys of representatives of the top income decile, who generally fall outside regular mass surveys, and 2–3 thematic online surveys.
These surveys stand out for their comprehensive approach and theoretical grounding. Although they are smaller in scale than Rosstat’s observations, the project creates a unique database in which information on employment, incomes, expenditure, asset and housing situation, consumption motives and practices, psychological characteristics, and time allocation is collected at the individual level. The combination of monetary and time-use dimensions of wellbeing yields estimates unobtainable from other surveys.
The regularity of the monitoring means it captures behavioural shifts in response to external shocks, not a static portrait of the household. The project is also notable for its openness. The microdata are available to researchers, experts and business associations via the HSE University repository on the project’s official webpage (link in Russian).
Research based on these empirical data (1, 2 – links in Russian) enables a deeper understanding of consumption in Russia and its transformation under the influence of external factors.
More cutting-edge research on the consumer behaviour of Russians, based on data from the HSE University project, can be found in the journal Voprosy Ekonomiki, 2026, No. 5.
