The influence of the Slovak household income differentiation on food expenditures - the Engel's expenditures functions estimation --

Abstract

The economy of the Slovak Republic, as a part of the European economic area, is significantly determined by the world globalization process. One of the aspects, which globalization brings, is the social differentiation deepening between countries as well as across the particular countries. This phenomenon occurs in the Slovak Republic also as a consequence of the increasing households' income differentiation. It is logical to assume that the household's members who live in the different living conditions behave differently in the commodity and service market due to different preferences. The purpose of this article is to quantify the influence of the household income differentiation on their behaviour in the food market. This market is divided into five separated food market groups according to the Healthy Eating Pyramid. The share of the particular food groups' expenditures in the total household food expenditures is used as a representative of the household food purchase preferences. The results of the analysis did not confirm the assumption about the significant influence of the household income differentiation on the purchases of the particular food groups. The estimation of the Engel's expenditure functions and the food expenditures elasticities with respect to the income changes are used for quantification of the impact of the household income differentiation on the particular food groups' expenditures. The food expenditures elasticities referred to the income changes verified differences among the household behaviour in the food market. The food expenditures of the households with a higher income are less elastic regarding the income changes than the food expenditures of the households with a lower income.

Keywords

• food expenditures
• food groups
• engel's expenditure function
• household income groups