Home appliances in the South Caucasus: Purchasing trends, 2000-2013

A fair share of the Armenian, Azerbaijani and Georgian population still lives in poverty and cannot afford to buy certain durable goods. According to CRRC’s 2013 Caucasus Barometer survey (CB), in Georgia, 28% of the population reported they did not have enough money for food; 33% had enough money for food, but not for clothes, and for 31% there was enough money for food and clothes, but not for durables. Only 7% of the population reported they could afford to buy durables, and a further 2% said they had enough money to buy anything they needed. The situation is similar in Armenia, but slightly different in Azerbaijan where less people report not having enough money for food (22%).

Using data from CB 2013, this blog post looks at ownership of washing machines, refrigerators and air conditioners in Armenia, Azerbaijan and Georgia, and, if the respective item was purchased in 2000 or later, when it was purchased.

Of the three durables we discuss in this blog post, refrigerators are the most widely owned (by 94% of households in Azerbaijan, 79% in Armenia and 78% in Georgia). Approximately half of the households have at least one automatic washing machine in Azerbaijan and Georgia, while the respective share is a bit higher in Armenia. Only a small share of households in Armenia and Georgia has at least one air conditioner, while the respective share is reported to be much higher in Azerbaijan (29%). Unsurprisingly, in all countries, the ownership of these appliances is higher in the capitals compared to other settlements.

Analysis of the time of purchase of these household appliances in Georgia shows growth in purchases from 2000 until 2008, followed by a decline that may be connected to the 2008 world economic crisis. In 2010, the purchases increased and then dropped again in 2011. In 2012, air conditioner purchases increased, while washing machine purchases dropped and refrigerator purchases remained stable. Less air conditioners and automatic washing machines were purchased in 2013.

Importantly, as shown in the chart below, the changes in the shares of the households purchasing these appliances coincided to a certain extent with the dynamics of GDP per capita, with the exception of 2013, when GDP per capita increased slightly compared with the previous year, while purchases of washing machines and air conditioners dropped.

Note: In 2001 and 2002, approximately the same shares of households purchased refrigerators, washing machines and air conditioners in Georgia.

In Armenia, the purchasing patterns of these appliances follow a trend similar to Georgia, with one exception: purchases of air conditioners increased in 2013.

Azerbaijan was also affected by the world economic crisis. However, GDP per capita continued to increase after 2009, while purchases of household appliances decreased. A possible explanation here might be that the GDP growth in Azerbaijan is connected to natural gas and oil sales. Hence it most likely reaches economic elites and less so the general population and its purchasing power.

To sum up, there are still many households in the region who do not own certain household appliances e.g., automatic washing machines and air conditioners. Residents of the capitals are better equipped with these appliances than people living outside the capitals.

To explore this topic more, have a look at the Caucasus Barometer data, here.