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

Abstract

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.

Consumption of food in relation to income and saturation limit of Slovak households

“…The values of the net money income (consumer expenditures) elasticity coefficients are presented in Table 3. These results confirm the findings of other authors (Lesáková 2011, Zentková andHošková 2011).…”

“…Generally, the economic welfare of the population grows when GDP is growing as well (Zentková and Hošková 2011). Statistical analysis of the standard of living of the population is based on monitoring of income and expenditures, the structure of household expenditures also showing features of polarisation due to the household income differentiation that influences food consumption (Zentková and Hošková 2011). Mihina et al (2018) pointed out that research of household expenditures and consumption is important and consumption may be considered as the ultimate purpose of economic behaviour, thus playing a major role in the economic theory of households.…”

Determinants of Household Food Basket Composition: A Systematic Review

“…With the growing income among Slovak households, the expenditure share on starchy foodstuffs group that prices of this kind of food group were quite low declined in the total household expenditures on food. The share of expenditures on the group of fruit and vegetables has a rising tendency corresponding with the households’ incomes ( 29 ). In Brazil, a mixed pattern including healthy and unhealthy food was associated with a higher income and education ( 30 ).…”