The Institutional and Economic Context of the Formation of Non-financial Wealth in Russian Households: from Privatization to Acquisition

Abstract

Tatyana Bogomolova – PhD in Sociology, Head, Department of Social Problems, Institute of Economics and Industrial Engineering, SB RAS; Associate Professor, Department “General Sociology”, Novosibirsk State University. Address: 17, Avenue of Academician Lavrent’ev, Novosibirsk, 630090, Russian Federation. E-mail: bogtan@rambler.ru

Tatyana Cherkashina – PhD in Sociology, Senior Researcher, Institute of Economics and Industrial Engineering, SB RAS; Head, Department “General Sociology”, Novosibirsk State University. Address: 17, Avenue of Academician Lavrent’ev, Novosibirsk, 630090, Russian Federation. E-mail: touch@nsu.ru

Citation: Bogomolova T., Cherkashina T. (2018) The Institutional and Economic Context of the Formation of Non-financial Wealth in Russian Households: from Privatization to Acquisition. Mir Rossii, vol. 27, no 2, pp. 62–89 (in Russian). DOI: 10.17323/1811-038X-2018-27-2-62-89

This article focuses on changes in the non-financial wealth of Russian households and discusses this change in the context of the dynamics of related institutional conditions. Household non-financial wealth is understood as property assets owned by household members, such as residential and non-residential real estate, industrial (unincorporated) assets, land, vehicles. The study relies on official state statistics regarding households, and state and departmental statistics on the privatization of enterprises, housing,
agricultural land, housing construction, and the production and sale of cars to describe the institutional background for the formation of non-financial wealth 1991–2014. The authors also utilize micro-level data from the Russian Longitudinal Monitoring Survey of HSE to calculate the number of households owing particular non-financial assets, and the concentration of assets between households.

The study reveals that by the end of the 1990s the privatization of national wealth had exhausted itself as a mechanism of household mass involvement in the ‘ownership’ of non-financial wealth. Increasing economic prosperity at the beginning of 2000s paved the way for new institutional mechanisms, such as the development of consumer (and then mortgage) lending, the launch of government programs for the development of housing construction, the automotive industry. These opened up relatively broad
opportunities (and risks) to Russians to increase non-financial wealth through the acquisition of property.

During 1991–2014, the proportion of households owning housing assets and vehicles increased steadily, however, the proportion of land owners and owners of production assets fluctuated. In the same period the share of households not owning any non-financial assets decreased significantly. Yet there is an apparent tendency towards polarization: the fractions of households that witnessed the highest growth were the ones with only a single asset in ownership and the ones owning more than three assets.