The Influence of Income on the Consumption Expenditures

Abstract

The contribution aims to identify the influence of income on Slovak household expenditures. Analyses are querying from the household income and expenditures data in the Slovak Republic during the period 2004–2018. The data source is the Statistical Office of The Slovak Republic. Descriptive statistics and regression analysis are used. The analysis of the goods and services expenditures reveals the major share of the expenditures is expended for the non-durable goods. The non-durable goods expenditures of the pensioners are 72% of their total consumption expenditures. Expenditures of employees, self-employees and other households for the non-durable goods present more than a half of their total expenditures. The share of services expenditures is also considerable. It is varying above 30% for all households kinds. The income influence on the household expenditures is analyzed using Engel’s expenditures functions which are used as the basis for the income elasticities of household expenditures. The analysis results are pointing to the fact that the less elastic on the income change is the reaction of the Slovak household expenditures on non-durable goods. A significant reaction on the income change is observed in household durable goods expenditures.

Keywords

• households expenditures
• households
• income engel’s expenditures curves
• income elasticity of expenditures