Methodological approaches to assessing of the social development sustainability in Ukraine’s rural areas

Results

A comprehensive review of information sources on the issues of assessing sustainability, social development, ensuring the well-being and quality of life of the population allows us to conclude that relevant scientific researches are carried out at the global level, at the level of individual states, at the local level, at the level of economic entities, households, and individuals.

Ukrainian and foreign scientists offer various theoretical constructions regarding the assessment of sustainability, ensuring the social development of rural areas and increasing the level of welfare of the rural population. It is reasonable to state that sustainability is the main goal of every economic unit -- enterprise, community, region, industry, economy, country, etc.

Resilience Measurement Technical Working Group [16] proposed to define resilience as "a capacity that ensures adverse stressors and shocks do not have long-lasting adverse development consequences". We believe that this definition of resilience is the most consistent with the intended results of this research, being clear, understandable, concise and measurable.

Accordingly, within the scope of this study, we will consider the concept of "sustainability of social development of rural areas" as the ability of the subject (the social sphere of the rural area) to adequately respond to various internal and external shocks, to be able to resist negative changes, minimize or eliminate risks, not to miss positive changes, and at the same time as the ability to use these changes to ensure the improvement of the social situation in the rural areas.

We consider the concept of "policy to ensure the sustainability of the social development of rural areas" as a system of actions, regulatory measures of influence and financial priorities for improving the social situation in the rural areas, raising the level and quality of life of the rural population by ensuring its employment, improving the working and living conditions of the peasants, preserving humanity in rural settlements, development of agricultural and non-agricultural production, protection and preservation of the environment, formation of motivation of subjects of economic activity to increase their social responsibility. It is worth noting that methods, approaches, algorithms, assessment models, etc. quite often differ from each other in the practice of management and economic analysis. Scientists tend to explain the variety of existing evaluation methods and their differences in terms of methods, approaches and indicators, namely by:

— the variety of assessment goals, which requires a variety of approaches;

— compliance of individual methods only with certain stages or tasks of the research;

— involvement of both statistical and expert indicators in the assessment process;

— using the method of expert evaluations to assign weighting coefficients of partial indicators in integrated evaluation systems;

— problems related to the lack of necessary statistical data;

— difficulties in assessment due to overloading of the system of indicators;

— the complexity of choosing an object for comparison, etc. [17; 18].

Determination of the most adequate methodology is now often recognized as one of the most difficult problems in the practical implementation of assessments. V. Litvinova [19] believes that an additional complication is based on the fact that the evaluation method should be universal, positioning, informative, and accessible.

Despite the ramification of the methodological apparatus, it can be confidently stated that rating (index) systems are among the most widely used methods of sustainability assessments. Ratings are used in all spheres of life upon the necessity to distinguish any objects or phenomena according to a single criterion or a set of criteria. These can be numerical, relative or ordinal indicators that reflect the status, influence, importance, popularity or other characteristics of an object or phenomenon. Partial indicators of the characteristics of specific objects were named "indices", representing a number or some combination of numbers, letters or symbols that shows the place of a certain object in the general population (in the rating) or characterizing its condition. Usually, indices can be used both in the rating system and separately. Indices can be full-fledged analytical indicators or be integrated into a single complex criterion.

The Social Progress Index [20], proposed in 2013 by Harvard University professor Michael Porter, is relevant to this study as an indicator of the country's social development and public wellbeing. There the social progress of the state is determined by indicators in three groups: basic human needs -- such as nutrition and basin medical care, water and sanitation, shelter and personal safety; development opportunities -- such as personal freedom and choices and personal rights; and people's well-being -- such as health and wellness, access to basic knowledge, access to information and communications, environmental sustainability. Bezon Kumar [21] emphasizes the importance of including household expenditure indicators when assessing its well-being. He proposed a new Household Welfare Index (HWI) based on aggregate statistics of per capita household expenditure in rural Bangladesh, which considers consumption expenditures, education expenditures, healthcare expenditures, accommodation expenses and investment expenditures.

Analyzing the approaches of foreign and Ukrainian scientists [1--4; 7--10; 12--14; 16; 20-- 26], we believe it is expedient to state:

1. The problem of raising the standard of living of the rural population, which lags significantly behind the urban population, has been brought to the fore during the last decades, which necessitates the search for appropriate directions, mechanisms, and schemes for its increase. Accordingly, scientists and other specialists offer certain criteria for assessing the standard of living.

2. Differences in the argumentation of methodological approaches to the evaluation of this level have been revealed, considering personal views of the researcher, the specifics of the socio-economic development of the country, the mentality of a specific nation and the scientific tools used. There is also no consensus in the scientific community on which set of indicators should be used to conduct such assessment and whether it is worth calculating a certain complex aggregated indicator or it is sufficient to use a set of individual indicators.

3. Common and different components in the proposed integral indices were determined. Social protection, education, medicine are defined among common ones, while demographic development, intellectual development, availability of cars per 100 families, sleep and rest etc. are defined among the different ones.

4. Upon arguing the essence of the proposed indicators, they are divided into quantitative and qualitative indicators, which are mutually complementary.

5. Regarding obtaining the necessary information for calculating specific indices, researchers referred to official statistical data, results of scientific research by other scientists, experts' services, and surveys of specified respondents.

We believe that it is most relevant to consider all indicators that serve as a measure of the resilience of social development in rural areas in four dimensions: incomes and expenditures of rural households; the level of infrastructure provision and access to services; indicators of population and employment of rural residents.

To develop an integral index of the level of sustainability of social development of rural areas, we will determine the principles of its formation. Considering the peculiarities of the research, we will define them as follows:

1. Consideration of the vectors of Ukraine's social development towards joining the European Union and orientation towards European legislation and European human values.

2. Consideration of foreign and Ukrainian theoretical and methodological developments regarding the development of a similar index and its components.

3. Justification of the purpose upon the development of the specified index.

4. Selection of a priority approach and distinguishing between qualitative and quantitative criteria.

5. Certainty in the formation and use of information sources.

6. Reflection of the Ukrainian mentality, rural life specifics and the realities of rural development.

7. Consideration of the genesis of interpretation of the components of this index.

8. Consideration of the hierarchy of the research object.

The main purpose of calculating the integral index of sustainability of rural areas social development (ISRASD) is to calculate its retrospective and current value using various indicators and to combine them in a single quantitative statistics.

Within the research twenty- one indicators were substantiated, which make it possible to assess the level of sustainability of social development of rural areas and to further compare it between regions of Ukraine.

The indicators are divided into four groups, each of which reflects the state of a certain area: rural population, employment and income of the rural population, expenditure of rural households and provision of social infrastructure and access to services (Table 1).

Table 1. List and description of demographic and socio-economic parameters used to form an integral index of sustainability of rural areas social development

Source: Developed by the authors based on their own research.

An individual index (a subindex) is calculated for each group, which together after weighting shows the integral index of sustainability of rural areas social development (ISRASD) in a given year. Upon choosing sub-indices and their components, we oriented ourselves towards those that most comprehensively characterize the social situation, well-being of rural populations, are qualitative, and are available.

The quantitative approach was chosen as a priority one. It is important that the selected indicators are not based on general, usually subjective experts' assessments, but are generally recognized and are actually existing indicators. Official statistical data, annually published by the State Statistics Service of Ukraine, are taken as a basis upon searching for information sources. The national hierarchy level of the research object was chosen.

We can provide additional justification for the selection of specific indicators. Thus, to testify that the most effective indicators of the well-being and living conditions of the population is the ratio of total resources and money income of the rural population to the actual subsistence minimum the following can be used. According to the UN European Economic Commission methodology, families in which the average per capita income does not reach 2/3 of the average level of the country's subsistence minimum are classified as poor. In Ukraine both total resources and money incomes of the rural population grew and increased by 2.5 and 2.7 times respectively over 2015--2021. Similarly, the legally established and actual subsistence minimum also steadily increased by 183.4% and 191.2% respectively (Table 2).

Table 2. Total resources and money income in relation to the actual subsistence minimum (on average per month per member of a rural household)

Source: Calculated by the authors based on the data of the State Statistics Service of Ukraine [15].

¹ The legally established subsistence minimum is approved annually by the Verkhovna Rada of Ukraine in the Law on the State Budget of Ukraine for the relevant year

² The actual subsistence minimum is calculated monthly by the Ministry of Social Policy of Ukraine to monitor the dynamics of the standard of living in Ukraine based on statistical data on the level of consumer prices [27].

However, its general dynamics compared to the total resources and money income of residents has a clear tendency to decrease. During the indicated period the share of the actual subsistence minimum in total resources decreased by 23.8 p.p., and in money income -- by 34.8 p.p.

A similar analogy is observed for equivalent per capita money income of the rural population over the studied period. The proportion of the population with equivalent money income per month in 2020 compared to the legislatively established subsistence minimum in rural areas was 5.6% and 39.9% compared to the actual subsistence minimum. For comparison, these indicators for urban population are 1.8% and 23.8%, respectively. These indicators have improved over the period 2015 -- 2020. However, the situation remains challenging since almost half of the rural population earnings are below the actual subsistence minimum, indicating issues of well-being and poverty. Moreover, there is a significant differentiation compared to the urban population. And the actual subsistence minimum nowadays exceeds the legislatively established one by almost twice.

As a result of inflation and the continuous increase in prices and tariffs for social services, the purchasing power of rural residents is decreasing. There is a reduction in the consumption of food products (over almost two decades 53--67% within the overall structure of total expenditures is allocated only to food products in rural families), non-food goods and services. The cost of living for rural residents continuously rises, leading to a deterioration in their quality of life. Therefore, it is reasonable to state that despite the increase in total resources and money income, the well-being of the majority of rural families not only does not improve but significantly worsens.

As a compelling argument for considering the expenditures of the rural population as one of the important criteria for the sustainable development of rural areas, the views of I. Perevozova and M. Polenkova [26], M. Talavyria [28], V. Za- horskyi and Ye. Borshchuk [29], O. Dudziak [30],

O. Mikhaylenko [31], G. Morozova [32] are presented. They tend to believe that sustainable rural development should be based on the main principles of sustainable development outlined in the "Agenda 21" [33]. These principles ensure the achievement of the main goals of sustainable development, such as improving the quality of life, ensuring the guaranteed health of the population, satisfying basic life needs of both the present and future generations, combating poverty, as well as rational production and consumption structures, rational use of natural resources, and preservation of ecosystems, climate, and the ozone layer.

Considering the 14 groups of consumer and non-consumer expenditures officially published by the State Statistics Service of Ukraine regarding total household expenditures, we will select four of the most vital ones, namely: meals and nonalcoholic beverages; housing, water, energy; health care, and education. Justifying the choice of these indicators, it's worth noting that Maslow's Hierarchy of Needs includes food, water, and shelter, and there should be no fundamental objections regarding the importance of health and education in the realities of the first quarter of the 21st century.

In determining the impact of individual indicators on the sub-index, correlation-regression analysis was employed, which is a component of Excel software (Table 3).

Table 3. The result of the influence of selected expenditures on the total expenditures of rural households (sub-index), 2014--2021

Source: Authors' own calculations [34].

Cumulative impact of individual expenditures on total expenditures is illustrated in Figure 1.

Fig. 1. Impact of selected expenditures of rural households on total expenditures of rural households, 2014--2021

Based on the results of calculations, the following conclusions can be drawn: expenditures on food have the most significant impact on the total expenditures of the rural population. The coefficient of determination (R2) is 0.9945 94, indicating a high level of accuracy in the approximation.

This suggests that the model reliably describes the phenomenon; the F-statistic's significance level is less than a = 0.01, which with a reliability of 99% rejects the null hypothesis of the inadequacy ofthe linear regression. This implies that the regression is adequate, indicating a direct relationship between total expenditures (V) and food expenditures (Y1); p-value for the variable Y1 is 4.95E-08, which is less than a = 0.01. So p indicator obtains a reliability of 99%, confirming a linear relationship between the variable (Y1) and the dependent variable (V).

To determine the weight of each of the four selected types of expenditures, the normalization method was used. In this case, it was assumed that the sum of all normalized values of partial household expenditure indices -- food and nonalcoholic beverages (I1), housing, water, energy (I2), health care (I3), education (I4) -- would equal 1.

To calculate the sub-index of rural areas' provision with social infrastructure (the fourth group of indicators) we surveyed qualified experts well-versed in the issues of social development in rural settlements to determine the weighting coefficients for the included indicators. Generalization of the survey results revealed that in terms of priority importance at the regional level during given period the highest shares were distributed among schools (0.32), healthcare facilities (0.25), preschool institutions (0.14), utilities companies (0.08), entertaining facilities (0.07), sports facilities (0.05), trade establishments (0.06), and public catering establishments (0.03). It was assumed that the sum of the weighting coefficients based on the daily service needs of rural residents in these specified directions of social infrastructure at that time should equal one (Table 4).

Table 4. Normative Indicators of Priority in the Need for Social Infrastructure Facilities in Rural Areas

Source: Calculated by authors.

Considering that each of the sub-indices has a different degree of importance in calculating the integral index of sustainability of rural areas social development (ISRASD), the method of expert assessments was applied to determine the weight of criteria. The generalization of the survey in our example showed that at the regional level the highest share by the weight coefficient was obtained for the following indicators: employment and income of rural population (0.48); rural household expenditures (0.29); provision of social infrastructure and access to services for the rural population (0.15) and rural population (0.08). The survey results are presented in Table 5.

Table 5. Criteria for the sustainability of social development in rural areas considered most important (priority) by respondents

Source: surveys.

Compiled by the authors based on the results of expert

As a result, an integral index of sustainability of rural areas social development (ISRASD), was compiled and calculated using the following formula:

sub-index of the rural population;

sub-index of employment employment and income and income of the rural population;

Iex -- sub-index of expenditure of rural households;

I f f f -- sub-index of rural areas' provision infrastructure with social infrastructure.

The versatility inherent in the formulation of the integral index facilitates its application to various comparative assessments.

The determination of factors as elements of the integral index, coupled with a detailed description of each coefficient, affords a lucid and transparent analysis of evolving trends pertaining to the social landscape within rural domains. Employing this metric in evaluations across different timeframes enhances its utility for operational oversight.

This analytical framework may be further nuanced by incorporating additional pertinent indicators, thereby enriching the depth of assessment.

The computation of the integral index of sustainability of rural areas social development (ISRASD), along with the values of partial indices and their dynamics, is presented in Table 6.

Table 6. Calculation of the Integral Index of Sustainability of Rural Areas Social Development in Ukraine, 2014--2021

Source: Calculated by the authors based on the own research results.

Figure 2 illustrates the values of the indices and its dynamics.

Figure 2. Dynamics of the Integral Index of Sustainability of Rural Areas Social Development in Ukraine, 2014--2021

Source: Developed by the authors based on the calculations presented in Table 6.

As indicated by the calculated data in Table 6 and Figure 2, the integral index of sustainability of rural areas social development has shown a decreasing trend since 2015. Over the specified period its value decreased by 24.1%.

The observed trend in the ISRASD for rural areas in Ukraine, as depicted in Table 6, is predominantly influenced by the sub-index of the rural population. Over the period from 2015 to 2021 its value decreased by 87.2%, averaging 0.3245 over the analysed period. Regarding individual parameters contributing to the sub-index of the rural population, it should be noted that they varied with different intensities. The number of working-age rural population decreased by 5.5% (from 5482.5 thousand people in 2014 to 5183.5 thousand in 2021). This reflects both the decline in the average population of rural areas and its aging, since according to statistical data, almost 40% of rural residents are pensioners and 17.5% of rural residents are aged 65 and older [15].

The fertility rate of the rural population steadily declined, reaching only 7.7% in 2021 compared to 12.2% in 2014, indicating a decrease of 4.5 percentage points over the analysed period. In contrast, the death rate increased, reaching its maximum value of 19.5% in 2021. Mortality in rural areas exceeds fertility rates by 2.5 times. The total rates by migration increase/ decrease in the number of the rural population fluctuated significantly during the analysed period from a maximum of 15.3 in 2016 to its minimum value of -15.4 in 2019.

Another factor contributing to the adverse trend in the ISRASD in Ukraine is the sub-index of employment and income of the rural population with its average value of 0.5715 within 2014--2021 (Table 6). Primarily, the deterioration of this subindex is attributed to a sharp decline in the employment rate of the rural population. In 2021, the employment rate in rural areas reached its lowest point since 2000, standing at 46.7%. Conversely, the unemployment rate of the rural population increased to 10.6%, and it rose to 11.2% among working-age individuals in 2021. One ofthe key factors contributing to the decrease in the employment rate of the rural population is the reduction in the demand for labour in agriculture. Specifically, the labour demand of agricultural enterprises decreased almost 7.5 times, from 10.4 to 1.4 thousand persons over 2005--2021. According to the State Statistics Service of Ukraine, in 2021, the share of the population employed in agriculture was 17.2%, while in 2000, this indicator was 21.6%. The reduction amounts to 4.4 percentage points, and the number of employees decreased by almost 40% from 4,367 in 2000 to 2,693 thousand in 2021. This was the result of the narrowing of agricultural labour, changes in the structure of agricultural production, low levels of wages for agricultural workers and other factors. Although the total resources and money income of rural residents increased over the analysed period, the share of rural population by per capita equivalent money income per month below subsistence line remains relatively high at 32.4%.

The third influential factors were the indicators included in the sub-index of expenditure of rural households. The total consumer expenditures of rural households increased over the analysed period, although at a somewhat lower rate compared to the wages of peasants. In 2021, calculated per household, they grew by 2.8 times to 10,569 UAH. In absolute terms, expenditures on meals and non-alcoholic beverages, as well as on housing, water, and energy, increased the most, while spending on healthcare and education increased the least. Simultaneously, in percentage terms, expenditures on housing, water, energy, and healthcare increased the most, while those on education increased the least. If analysed in relation to total expenditures, spendings on housing, water, and energy increased the most, and expenditures on meals and non-alcoholic beverages slightly decreased. Expenditures on education remained practically unchanged.

The situation with the provision of rural areas with social infrastructure objects is complicated. There is a persistent trend of its reduction over 2014-2021. Particularly, the number of secondary schools decreased by almost 30%, of hospitals -- by 28.6%, libraries -- by 13.6%, entertainment facilities -- by 1.3%, preschool institutions -- by 3.7%, and sports facilities -- by 5.9%. These changes consequently affected the value of the subindex of rural areas' provision with social infrastructure. Although the value of the sub-index did not change over the analysed period, having the same numerical value of 0.955 in 2021 and 2014, its level varied over years from 0.955 reaching maximum of 0.982 in 2015 (Table 6). Those rural areas that have been and are currently under temporary occupation, in the area of military operations, the rural settlement network is being destroyed and its structural ratio is deteriorating. Residential buildings have been partially or completely destroyed, utility enterprises are nonfunctional, and the engineering infrastructure is in an unsatisfactory condition in most villages that were or are in the active combat zone.