COMPLETE ECONOMETRIC ANALYSIS OF THE CORRELATION BETWEEN THE TOTAL REAL AVERAGE MONTHLY INCOMES AND EXPENSES OF A ROMANIAN HOUSEHOLD

Abstract

It is known that the monthly expenses of a family in Romania are dependent on their income, starting from the fact that the expenses can be much better managed if we take into account the level of income that family has. As expected, according to a statistic made by the European Union, in 2021, Romania has the lowest cost of living among EU countries. On the other hand, in 2021, the annual inflation in Romania reached the highest level in the last 10 years, of almost 8%. Also, the large increases in gas and electricity prices have led to a decrease in the living standards of Romanians.This econometric study substantiates the connection between the average total monthly expenses, and the total average monthly incomes of a Romanian household, in the period 1997-2020. Based on the linear regression model, forecasts will be made in the end.

Keywords

• econometric analysis
• correlation
• estimation
• eviews
• least squares method
• forecast