Household - what is it? Types, structure, functions of the household

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:44

The household, in accordance with modern theoretical approaches available in economic science, is one of the key socio-economic subjects. The dynamics of their formation largely determines the efficiency of the state's economy and the development of civil society. What is a household? What subjects can it be represented by?

What is a household?

Household is, in accordance with the definition common in the scientific community, an institutional social unit, which consists of a relatively small group of citizens living together, to one degree or another pooling their incomes and resources, as well as jointly consuming a number of goods and services.

As a rule, households are run by families. Households can be not only consumers of goods and services, but also their producers - for example, if their subjects carry out entrepreneurial activities.

There is another interpretation of the term in question. It was created by economists. According to it, a household is a group of people who make collective economic decisions. For example, related to the purchase of goods, use of services oror their production, if household members are entrepreneurial.

Key features of a household

A common point of view is that a household is a social group characterized by the following main features:

- isolation (both legal and actual), - accommodation of participants in the territory of one residential premises or a group of those located nearby, - regularity of social communications - assuming that members of the household interact with each other with varying degrees of intensity.

As we noted above, households are most often formed by families. But it is not always the case. Possible household subjects are firms, public organizations, churches, non-profit structures, political parties. All of them, one way or another, will correspond to the main features of the household that we have discussed above.

Households perform a number of economic functions. Let's study them.

Economic functions of households

The main functions of households in terms of the economy are:

- distribution of capital;

- control over the formation of individual consumer preferences;

- investment of accumulated capital.

Of course, there are a number of other significant economic functions of households. Thus, the corresponding social groups form market demand by buying goods and services produced by other economicsubjects. Households, as we noted above, can produce various products and services themselves. It can be noted that economic relations can also arise between individual members of the household. This may be due to various legal relations - debt, production, labor.

In the corresponding social group, local economic roles associated with capital management can be formed. Thus, a financial household is conducted. The considered social group can be an independent economic entity that interacts: with other households, with individual citizens of their country, with government agencies, with commercial banks, with various types of enterprises, with non-state structures, with foreign citizens and organizations.

Let's study the basic economic functions of households - distribution, control and investment, in more detail.

Distributive economic function of households

One of the key economic functions of households is the distribution of funds. Those or other subjects of the household who earn a large amount of money, one way or another, share them with others. In families - as a rule, free of charge and sufficiently active. In more disparate social groups, this distribution is rare.

Therefore, the larger the household, the more pronounced the distribution of capital in it becomes. This function plays a positive role from the point of view of the entire macroeconomic system, since the presencecapital in people with different needs stimulates the production of goods and the provision of services in relevant areas. If funds were concentrated in a small number of people, then this would contribute to the development of a smaller number of industries - those that can satisfy the needs of a particular citizen.

Household consumption generates demand, as a rule, for a much wider range of goods and services.

Control economic function of households

The next significant function of households is control. Its specificity lies in managing the needs of each of the members of the corresponding social group.

The fact is that household incomes, even if we are talking about associations within the same city, can vary greatly. And if one level of spending is acceptable for representatives of one social group, then members of another household, based on disposable income, may not be able to count on the same pattern of consumption. In this regard, the purchasing aspirations of individual household entities may be subject to control - in order to optimize the structure of their expenses.

Household investment function

The next most important function of households is investment. Household finances can be directed to support the activities of a wide variety of economic entities. At the same time, these communications can already be observed at the level of daily expenses of members of the corresponding social group - when shopping in a store, using various services. Household spending actually becomes an investment in businesses that supply certain goods or services. In addition, financial investments of households can be represented by bank deposits, participation in stock trading, private investment support for any projects.

The efficiency of running a financial household largely depends on the quality of its local budget management. Let's study this aspect in more detail.

Household budget

We noted above that the household is an independent economic entity. Thus, household finances are autonomous in terms of priorities in their distribution, despite the fact that their receipt largely depends on the actions of other entities with which the corresponding social group communicates.

The household budget, like a financial plan formed by the state or an enterprise, consists of estimated income and expenses. Its distinctive specificity lies in the fact that when compiling it, as a rule, the actual, rather than estimated, individual needs of each of the household members are taken into account. For someone, one volume of goods and services is needed, for another - a completely different one. In turn, budgets within the framework of larger-scale social institutions can be drawn up on the basis of calculated indicators that are not always combined with the real individual needs of a particular citizen. This is the advantage of budgeting at the level of the local household, in the possibilitytake into account the consumer preferences of all its participants.

Of course, in many cases the concept of "budget" in the household is considered informally. In principle, it is rare when someone from the family undertakes to draw up a real plan of income and expenses reflected in a separate document. Although, when it is really needed, many people do this work - using, for example, specialized types of software, mobile applications, and they do it very effectively.

But, regardless of the method of drawing up the household budget, its main feature remains - focus on the individual structure of needs. At the same time, it often does not matter how much a particular member of the household earns. This is another feature of the economic role of the respective social groups, when the source of income and the subject of consumption may not have mutual rights and obligations. But, it should be noted that such a specific relationship is more typical for family households and is not very common in corporate legal relations.

What are the types of households

Let's study what types of households there are. The classification of the corresponding social groups based on the number of subjects is widespread. Thus, households can be single or group. The former are formed by individual citizens or families. The second - by several groups of people.

Other common household classification criteria:

- territorial affiliation(it is assumed to correlate the location of the corresponding social group with the city, region, state);

- ability to pay (in this sense, households can have a high, medium or low income);

- property characteristics (determined based on the type of housing and property owned by household members).

Researchers may define other criteria - related, for example, to the social status of household members, the labor potential of the relevant social group, the level of education and qualifications of citizens who are part of the household.

Household structure

Let's study what is the structure of the household. This term can be understood as:

- household composition;

- distribution of functional roles in the corresponding social group.

Regarding the composition of the household: it may correspond to the marital status of each of its members. It can be parents and their children, other relatives. Regarding functional roles in the household: they can be represented by participants who form capital by working, developing a business, distribute income and expenses of households, make decisions regarding the management of resources available in the household - real estate, household tools, play a passive economic role within the household, but active - in cooperation with other business entities.

Depending on the size of the household, socio-economic characteristicsother social groups of the corresponding type that have developed in a particular city or region, the functional roles of household members can be represented in a much wider range.

Households and government

Among researchers there is an ambiguous assessment of the role of the state in the formation of households. On the one hand, the corresponding social group is generally independent of the activities of any state structures. On the other hand, the government can play a critical role in terms of maintaining household resilience.

First of all, in the economic sense. Here we can talk both about providing working members of the household with opportunities to earn in the financial system of the state - for example, through employment in budgetary structures, in the civil service, and about providing direct assistance to citizens in the form of transferring funds in the form of subsidies, allowances, distribution in favor of those or other households targeted support measures.

In turn, the household performs significant functions for the state - both social and economic. As we noted above, the corresponding associations are formed, as a rule, by families, whose education is the most important factor in the development of civil society. Households generate demand in many segments of the economy - this helps to increase the economic stability of the state, increase its GDP.

Household income

Let's study how household incomes can be formed. Mainsources of capital to be distributed to the respective social groups are:

- salary;

- compensation in the framework of civil law relations;

- entrepreneurial activity;

- lease of certain assets;

- receiving dividends as a result of investments in the assets of certain enterprises;

- making a profit by trading securities;

- use of natural resources;

- receiving bank interest on deposits.

Individual members of households may derive one or more of the listed types of income. As a rule, the corresponding cash receipts are reduced by the amount of mandatory payments - in the form of taxes, commissions, other deductions provided for by law and the terms of contracts.

Household spending

Expenses, in turn, households can be represented:

- costs associated with the maintenance of disposable resources (for example, paying utility bills, if we are talking about real estate);

- with the purchase of basic types of goods - food, household chemicals, electronics;

- with the use of everyday services - transport, banking, communications;

- long-term acquisitions - the purchase of new real estate, cars and other equipment.

Household spending can be supplemented by the use of legal, medical,educational services - based on the structure of needs that is formed in a particular social group. Let's consider this aspect in more detail.

Structure of needs within a household

Households are independent economic entities, the composition of which, however, can be represented by participants with different needs. For some, it is enough to purchase basic goods and services, for others it is necessary to turn to additional services, purchase more expensive products.

The main factor determining the structure of needs in the respective social groups is the disposable income of households. The larger it is and the more actively its distribution is carried out, the more likely it is that the personal demands of farm participants in terms of consumer preferences will increase. In some cases, they may be replaced by social priorities. For example, it may be preferable for a person to spend the available money not on the purchase of some expensive product, but on sponsorship of financial support to other people or organizations. In many respects, the appearance of such preferences depends on such factors as the level of education, upbringing of a particular person, and his social circle.

Household shaping factors

Now let's consider under the influence of what factors a household can be formed Above, we studied the main types of households, the criteria for their classification. Each of them will correspond to a separate group of factors in question. So, if we are talking about a singlehousehold, most likely, it will be represented by a single family. The factors of its formation are, as you know, human relationships. People get closer, create families and start a common household. The economic factor in this case can play an important role, but it is usually secondary.

In turn, the formation of group households can be primarily due to just the same economic necessity. Social groups of the corresponding type involve the unification of several families into a common household - due to the fact that in such a format it will be much easier for each of them to realize their needs, optimize the structure of expenses.

The territorial affiliation of potential household members, their income level and the types of property they own can also play a significant role in the formation of the considered associations. So, for example, in the conditions of the open area of the Far North, it would probably make sense for indigenous peoples living in the respective territories, having relatively low incomes and not the most liquid property, to unite in households.

CV

The household is a socio-economic unit that plays an important role in the development of society and the state. Uniting into households, people contribute to the strengthening of the intensity of mutual communications, more efficient distribution of capital, the formation of an optimal structure of consumer preferences within terms of disposable income.

The subjects of a household are usually families. But the formation of appropriate social groups and organizations is quite possible. The structure of the household can be determined by its composition and distribution of functions among the participants, depend on the economic and cultural characteristics of the community within which the corresponding type of social group is formed.