15
2, XX, 2017
Economics
DOI: 10.15240/ ul/001/2017-2-002
In oduc ion
Consume ’s p e e ences and weal h (income,
esou ces) a e iewed as exogenous quan i ies
in he neoclassical heo y. Me hodological
indi idualism, a ional beha iou , equilib ium
and pe ec in o ma ion o consume a e he
u he ea u es o his concep .
Simple p ecau ions a e he necessa y
condi ion o model applica ion. Me hodological
indi idualism assume, ha he p inciples o
he indi idual subjec s beha iou a e he mos
impo an de e mining ac o s o he model
unc ioning. These subjec s ac acco ding
o maximizing o he o al u ili y in he gi en
condi ions. The concep o equilib ium is s a ic.
The pe ec in o ma ion p econdi ion need no o
be necessa y ul i lled because he con empo a y
concep s o he consume ’s beha iou unc ion
in he condi ions o isk and unce ain y
(Agui e So elo & Block, 2014). Ins i u ional
concep s o consump ion a e de i ed om
he T. Veblen’s heo y o he leisu e class
consump ion (G zega, 2015). The p e e ences
a e in l uenced by he posi ion o he consume
subjec in he social hie a chy and by ac i i y
o i ms. Acco ding o J. Galb ai h, i ms can
pa ially c ea e he desi es o he consume s.
No only he p e e ences, esou ces, and he
indi idual beha iou , bu also social ins i u ions
a e impo an ac o s o consump ion in he
ins i u ionalism concep s. Consump ion is
iewed also as a social beha iou . Psychological
aspec s o he consume subjec s’ beha iou
a e also impo an . In he mode n concep o
consump ion, he e mus be iewed all aspec s
o i . Consume beha iou is based on he
decision-making o indi iduals spending hei
own esou ces (i.e. ime, money and e o s)
in o de o ob ain he i ems associa ed wi h
consump ion No o ný and Duspi a (2014);
Ho áko á (2015). This o m o beha iou
in ol es he easons why, when, whe e, how
o en and wha people buy, how o en hey use
he pu chased i ems, how hey e alua e hem
a e he pu chase, and in which way hese
ac o s in l uence hei u u e pu chases Š édl,
Soukup and Se e o á (2013); Wanninayake
W.M.C. Banda a (2014).
Ma ke ing is so much mo e han c ea ing
a ca chy ph ase o a jingle people will sing
o days. Unde s anding consume beha io
is a i al aspec o ma ke ing. Consume
beha io is acco ding o S á ko á e al. (2006)
he s udy o how people make decisions abou
wha hey buy, wan , need o ac in ega ds
o a p oduc , se ice, o company. This issue
was s udied by K ishna and Schwa z (2014) in
de ail and in ela ion o psychology aspec s. I
is c i ical o unde s and consume beha io o
know how po en ial cus ome s will espond o
a new p oduc o se ice (Bačík, Ga u o á,
& Fedo ko, 2015). I also helps companies
iden i y oppo uni ies ha a e no cu en ly me
(Ga u o á, Vagaso a, & Ko ac, 2016). Th ough
esea ch and obse a ion, se e al models ha e
been de eloped ha help u he explain why
consume s make decisions, including black
box, pe sonal a iables, and complex models.
The black-box model is based on ex e nal
s imulus- esponse, meaning some hing igge s
he consume o make buying decisions ha
a e in l uenced by many ac o s, including
ma ke ing messages, sampling, p oduc
a ailabili y, p omo ions, and p ice (Michalski,
2008; And ejo ska & Banocio a, 2014; Raiso a
& Du co a, 2014).
When in l uenced by he pe sonal- a iable
model, consume s make decisions based on
in e nal ac o s. These in e nal ac o s may
include pe sonal opinions, belie sys ems,
alues, adi ions, goals, o any o he in e nal
mo i a o (Dúb a ská, Mu a, Ko ulič, & No o ný,
2015). The complex model o consume beha io
conside s bo h in e nal and ex e nal a iables.
ENGEL’S APPROACH AS A TOOL FOR
ESTIMATING CONSUMER BEHAVIOUR
Rena a Benda-P okeino á, Kamil Dobeš, Ladisla Mu a,
Ján Buleca
EM_2_2017.indd 15EM_2_2017.indd 15 14.6.2017 9:29:1514.6.2017 9:29:15
16 2017, XX, 2
Ekonomie
Human ood choice is a complex
phenomenon in l uenced by a wide ange o
ac o s (Hes e al., 2008; Cza niewski, 2014).
The heo y o planned beha iou o e s a means
o ying o unde s and he oles o some o
hese ac o s. E idence will be p esen ed o he
inclusion o measu es o sel -iden i y and mo al
obliga ion. P oblems wi h he measu emen
o pe cei ed con ol and possible means o
o e coming hem will also be discussed.
The choice o oods is an a ea o conce n
o many people in ol ed in he p oduc ion and
dis ibu ion o oods, and o hose conce ned
wi h nu i ion and heal h educa ion. Rela i ely
li le is known abou how and why people
choose he oods ha cons i u e hei die s o
abou how hei choices can be in l uenced in an
e ec i e way.
Like any complex human beha iou , ood
choice will be in l uenced by many ac o s. The e
a e a numbe o models in he li e a u e, which
seek o delinea e he e ec s o likely in l uences.
Pique as-Fiszman and Jaege (2016)
concen a e on he ques ion why consume s
associa e ce ain emo ions wi h ood/be e ages
and meal occasions. This opic is impo an as
people’s ood- ela ed beha iou and a i udes
a e shaped by hese associa ions. Howe e ,
many such models a e simply ca alogues o
he likely in l uences. Few o hem p esen any
indica ion o he likely mechanisms o ac ion o
he mul i ude o ac o s iden i i ed, no do hey
quan i y he ela i e impo ance o ac o s o
allow any quan i a i e es s which a e p edic i e
o ood choice. Al hough such models can be
use ul in poin ing o he a iables o conside
in s udies in his a ea, hey do no p o ide
a amewo k o quan i a i e modelling o ood
choice beha iou .
The ac o s in l uencing ood choice a e
ca ego ized as hose ela ed o he ood, o he
pe son making he choice and o he ex e nal
economic and social en i onmen wi hin
which he choice is made (Hildenb and, 1994;
Vi gle o a, Dobes, & Voj o ic, 2016). Some
chemical and physical p ope ies o he ood will
be pe cei ed by he pe son in e ms o senso y
a ibu es, e.g. l a ou , ex u e o appea ance.
Howe e , pe cei ing hese senso y a ibu es
in a pa icula ood does no necessa ily
mean ha a pe son will o will no choose o
consume ha ood. I is he pe son’s liking o
ha a ibu e in ha pa icula ood which will
de e mine whe he o no he ood is chosen.
O he componen s in he oods will ha e e ec s
upon he pe son, e.g. educing hunge , and he
lea ning o he associa ion be ween he senso y
a ibu es o a ood and i s consequences
appea s o be a majo mechanism by which
p e e ences de elop. Ma ke ing and economic
a iables, as well as social, cul u al, eligious o
demog aphic ac o s a e also likely o be e y
impo an .
This pape applies a beha io al app oach o
consump ion o connec di e ences in sa ia ion
pa e ns be ween inna e needs wi h sys ema ic
changes in consump ion expendi u es when
income ises. I is conjec u ed ha , a he le el o
agg ega e expendi u e da a, hese di e ences
ansla e in o di e en income elas ici ies o
demand o g oups o goods and se ices ha
a e likely o be consumed o se e hose needs.
This way, i should be able o explain a good
deal o he di e ences in he shapes o Engel
cu es o he unde lying goods and se ices
(Lewbel, 2008; Lades, 2013).
We illus a e in he pape he echnique o
Engel cu e compu a ion on he household’s
income and expendi u e da a o igina ed om
he S a is ical O i ce o he Slo ak Republic.
Resul s o he me hod will be p esen ed as
a se o elas ici ies, which p o ide deepe
knowledge abou consume ’s beha io o he
Slo ak households.
1. Theo e ical Backg ound
o Consume Beha io
Fac o s ha in l uence he pu chasing
beha io o consume s a e e y signi i can o
businesses, because based on hese ac o s,
i is possible o ocus he ade policy, which
hen could lead o be e business esul s
(e.g. an inc ease in sales olume, ma ke
sha e, dis ibu ion o a po olio o clien s,
e c.). E e y human is a consume , and o he
o he consume s ep esen s he key ac o s
ha in l uence hei pu chasing beha iou .
Theo y and p ac ice nowadays lacks g ea e
links be ween businesses and consume s,
based on segmen a ion by app op ia e
segmen a ion c i e ia. Mo e de ailed desc ip ion
o segmen a ion c i e ia highligh s (Koudelka,
2005). In many a eas o law such connec ions,
including esea ch ha would acili a e company
decisions is inadequa e. The e a e a numbe
o esea ch p ojec s ela ed o li es yle, d ess,
smoking, ea ing (Šol és & Ga u o á, 2014),
bu esea ch including models and ac o s
EM_2_2017.indd 16EM_2_2017.indd 16 14.6.2017 9:29:1514.6.2017 9:29:15
17
2, XX, 2017
Economics
in l uencing pu chasing beha iou consume s
in many manu ac u ing indus ies is missing.
The issue o pu chasing beha io o consume s
was discussed by se e al p ominen au ho s
(Ko le & A ms ong, 2004; Solomon, Ma shall,
& S ua 2006; S á ko á e al., 2006; and
o he s). The assump ion is ha he consume
will ac a ionally and will maximize he o e all
bene i ha is associa ed wi h a combina ion
o goods and se ices ha accompany he
p oduc . Acco ding o Hes e al. (2008),
howe e , i is limi ed by he consume when
making decisions, especially by he i nancial
esou ces. In many i elds linking businesses
and consume s, including esea ch hei
beha io ha would acili a e decision o
company managemen is insu i cien . One o
o he app oaches o he analysis o consume
beha iou is also moni o ing beha iou when
he e is a change in in o ma ion cos . This may
a y ac oss consume s, which is he case when
consume s who sea ch o in o ma ion a e
“bounded a ional” – making andom e o s due
o limi ed a en ion (Manzini & Ma io i, 2014)
o “ a ionally ina en i e” – op imally alloca e
a en ion (Ma ějka & McKay, 2015). Following
hese app oaches, i is also impo an o s udy
how o op imally in o m a consume abou he
alua ions o mul iple goods when a consume
can lea n abou ewe goods han he/she can
consume (Saak, 2016).
Ma ke o ien a ion is an app oach based on
ma ke ing concep ion, in oduced by D ucke
(1954). Al hough he p inciple o ma ke
o ien a ion has been known o six y yea s,
de ailed analysis only began a he beginning
o he 1990s. In 1990, he Jou nal o Ma ke ing
published he esul s o wo s udies sponso ed
by he Ma ke ing Science Ins i u e. Those
s udies we e made by Kohli and Jawo ski
(1990) and by Na e and Sla e (1990). These
wo pieces o esea ch had a subs an ial
impac on he o ma ion o a new app oach o
ma ke ing and subsequen s udies on ma ke
o ien a ion and ook he ini ial s eps owa ds
c ea ing a de i ni ion o ma ke o ien a ion. The
de i ni ion o Kohli and Jawo ski (1990) was
o ally di e en o hose by Na e and Sla e
(1990). The de i ni ion by Kohli and Jawo ski
(1990) pe cei es ma ke o ien a ion as an
implemen a ion, namely as an ins umen o
s a egic decision-making. Al e na i ely, he
de i ni ion o Na e and Sla e (1990) pe cei es
ma ke o ien a ion om a business lea ning and
co po a e cul u e poin o iew No o ný and
Duspi a (2014).
O he app oach by Š édl, Soukup and
Se e o á (2013) and by Pe éz e al. (2013) we e
applied in mode n ma ke economy whe e he
supply exceeds demand, and he impo ance
o he “consume ’s beha iou in he ma ke
analysis” con inuously inc eases. Consume ’s
p e e ences a e iewed as exogenous a iables
in a neoclassical heo y. They a e no explained
in a amewo k o he concep bu a e iewed as
gi en ones. Heikkinen (2015) s udied decline
and g ow h in a dynamic equilib ium model wi h
p e e ence he e ogenei y. Simula ions sugges
ha decline igge ed by olun a y simplici y
inc eases equilib ium wel a e unde ex e nali ies
in consump ion and leisu e. Me hodological
indi idualism, a ional beha io , equilib ium,
and pe ec in o ma ion abou he consume s
a e he nex ea u es o his concep . Simple
p ecau ions a e a necessa y condi ion o he
model applica ion. Me hodological indi idualism
means ha p inciples o indi idual subjec s
beha iou a e he mos impo an de e mining
ac o s o model unc ioning. These subjec s
abide by he p inciple o o al u ili y maximizing
in gi en condi ions. The concep o equilib ium
is s a ic. Pe ec in o ma ion p ecau ions doesn’
need o be necessa ily ul i lled, because
con empo a y concep s o consume ’s beha io
unc ion in he condi ions o isk and unce ain y.
Ins i u ional concep s o consump ion a e
de i ed om Veblen’s heo y o leisu e class
consump ion (He ns ein, 1997). The e is also
a s ong ma ke ing in l uence. Sub amanyam
and Kuma aswamy (1981) conside he e ec o
ma ke ing policies and condi ions on demand.
I is wo h o men ion a ew sma ma ke ing
ools in l uencing cus ome beha iou . Online
cus ome beha io is a new phenomenon and
i is a e y impo an case o i m´s ma ke ing
(Rypako a, Mo a ciko a, & K izano a, 2015).
K amolis and Kopecko a (2014) deal wi h his
kind o sma ma ke ing ool (P oduc placemen )
which clea ly in l uences cus ome s. Indeed,
he e a e no only luxu y goods, (K amolis &
D abko a, 2012) which a e p omo ed by means
o p oduc placemen . This ma ke ing ac i i y
has a simple pu pose – o connec b ands wi h
app op ia e en e ainmen pa ne s o maximize
b and ele ance –- which leads o s eng hening
consume s’ a i udes o p omo ed p oduc s.
This sma ma ke ing whispe ings can build he
p e e ences wan ed.
EM_2_2017.indd 17EM_2_2017.indd 17 14.6.2017 9:29:1514.6.2017 9:29:15
18 2017, XX, 2
Ekonomie
Mo eo e , p e e ences a e in l uenced by
he posi ion o a consume subjec in he social
hie a chy. No only p e e ences, esou ces
and indi idual beha io , bu also social
ins i u ions ep esen he impo an ac o s
o consump ion in ins i u ionalis s’ concep s.
Consump ion is also iewed as social beha io .
Ul ima ely psychological aspec s o consume
subjec ’s beha io a e also impo an . The
con empo a y ela ionship be ween b and
pe sonali y and consume pe sonali y has
become a esea ched issue in ecen yea s and
i was s udied by Bane jee (2016). The au ho ´s
esul shows buying decision, pe sonali ies
o p omo ed p oduc s and co po a e b ands
in l uencing consume s´ p e e ences.
Engel cu es desc ibe he change
o expendi u e (o demand) o di e en
commodi ies as a unc ion o income. I
is common o speak abou „c oss-sec ion
Engel cu es“ i one conside s expendi u es
o a popula ion o households ( o example,
all households in a la ge coun ies (Bece a
Alonso, And oniceanu, & Geo gescu, 2016))
a he han single indi iduals. Since he wo k
o Engel (1857), c oss-sec ion Engel unc ion
has been a majo esea ch in economies
and econome ics. Engel cu es ha e been
ex ensi ely s udied o es ablish empi ical
ela ionships be ween expendi u e and income.
Engel’s law s a es, ha he budge sha es o
he commodi y ood dec ease wi h an income.
Gene ally, Engel unc ions can be used o
classi y commodi ies in o luxu ies, necessi ies
and in e io goods. The mos known classical
s udy o c oss-sec ion Engel cu es is ha
o P ais and Hou hakke (1955). Impo an
objec i e is he de e mina ion o budge
elas ici ies o di e en commodi ies om he
co esponding Engel cu es.
In demand analysis, he s uc u e o c oss-
sec ion Engel cu es has been exploi ed o
build up demand sys em. Wo king (1943)
p oposes he pa ame ic model m(x) = θ1x +
θ2x logx o he c oss-sec ion Engel unc ion
m(x) o some commodi y. He e, x deno es
income, he θ1, θ2 a e unknown pa ame e s,
which a e o be es ima ed om gi en da a.
Dea on and Muellbaue (1980) conside his
model as an impo an mo i a ion o hei
amous „AIDS – almos ideal demand sys em“.
When doing he analysis o ood demand, he
model o AIDS was used in wo ks o Benda
P okeino a and Hano a (2016), Ulubasoglu
e al. (2016) and Haya e al. (2016). The
i nding o Lewbel (1993), elling ha a be e
pa ame ic model migh be w i en in he o m
m(x) = θ1x + θ2x log x + θ3x (log x)2 is o en
in e p e ed as a jus i i ca ion o he quad a ic
almos ideal demand sys em o Blundell e al.
(1993), which gene alizes he esul s o Dea on
and Muellbaue (1980). These app oaches
a e based on he idea o eco e abili y o
indi idual beha io om agg ega e da a. In
he p esen con ex his co esponds o he
assump ion ha he s uc u e o c oss-sec ion
Engel cu es e l ec s he s uc u e o indi idual
ones. The same a gumen was used by Hä dle
and Je ison (1991), whe e a ce ain a iance o
es ima ed c oss-sec ion Engel cu es o e ime
we e used o d aw conclusions on indi idual
beha io .
Engel cu es also play a ole in he
heo e ical economics. Hildenb and (1994),
and Kahneman (1997) p o ides condi ions on
he s uc u e o hese cu es which ensu e he
law o demand.
The e is hus s ong empi ical and heo e ical
in e es o analyze he c oss-sec ion Engel
unc ion o eal popula ions. A p e equisi e o
any economic in e p e a ion is a easonable
es ima ion o hese cu es om gi en c oss-
sec ion da a abou household expendi u es and
income.
S a is ically, c oss-sec ion Engel cu es
a e eg ession unc ion, m(x) equals o he
condi ional expec a ion o expendi u e o
a commodi y gi en he income le el x. The
classical app oaches in eg ession analysis a e
based on pa ame ic models, i.e. m(x) = g(x, θ)
wi h a known unc ion g and an unknown
pa ame e θ. The as majo i y o s udies o
Engel cu es a e based on such pa ame ic
models. Apa om he Wo king model, he e
a e many u he pa ame ic app oaches
(double loga i hmic, semiloga i hmic, e c.). In
any pa ame ic model he unc ional shape o
he es ima e is al eady gi en by an assump ion.
The quali y o he esul ing es ima o depends
hea ily on he co ec ness o his speci i ca ion.
I a model is co ec , good es ima o s o he
pa ame e s and he cu es can usually be
ob ained. Howe e , i he model is poo ly
speci i ed, he esul ing es ima o is no e en
consis en . Since he economic heo y doesn’
yield any in o ma ion abou a co ec pa ame ic
model, he e is hus eason o conside he
al e na i e app oaches.
EM_2_2017.indd 18EM_2_2017.indd 18 14.6.2017 9:29:1514.6.2017 9:29:15
19
2, XX, 2017
Economics
2. Ma e ial and Me hods
Acco ding o F iedman’s hypo hesis he
consump ion o indi iduals o households
depends on p income, i does no depend on
he cu en income o economic uni as Keynes
insis ed. Pe manen income can be explained
as an a e age income, which an indi idual
expec s o ea n du ing his li e using his labo
and capi al. Šimso á and Reisso á (2016) deal
wi h he opic o expec ed income o selec ed
g oups o inhabi an s, e.g. uni e si y s uden s.
Acco ding o Gombos, Kiss and Z a a (2016) i
depends on household wel a e (human capi al,
educa ion, heal h included), in e es a e, and
expec ed job aca ions.
The simila app oach was desc ibed by
Engel. Engel cu es desc ibe he change
o expendi u e (o demand) o di e en
commodi ies as a unc ion o income om he
heo e ical iewpoin .
2.1 Engel Cu es and he Income
Elas ici y o Demand
The gene al connec ion be ween he shape
o an Engel cu e and he income elas ici y o
he espec i e good can easily be illus a ed. I
an Engel cu e o good i is exp essed in e ms
o he expendi u es qi spen on i depending on
he households’ income y, he slope o he i ed
cu e dqi/dy can indi ec ly be used o de i e i′s
income elas ici y o demand. As a good’s income
elas ici y is de i ned by he ela i e change in qi
(dqi/qi) di ided by he ela i e change in y (dy/y),
i can be es ima ed by eg essing loga i hm o qi
on loga i hm o y Lewbel (2008).
Using expendi u e sha es (wi=qi/ywi=qi/y),
ins ead o he expendi u es spen on i,
acili a es mo e di ec ly an in e ence o he
income elas ici y o demand om he cu e’s
slope. While an inc easing slope ep esen s
mo e han p opo ional expendi u es, hus
luxu ies, a dec easing slope poin s o less han
p opo ional expendi u es wi h ising income,
i.e., necessi ies. Al hough Engel cu es usually
show conside able nonlinea i ies Lewbel
(2008), budge sha e Engel cu es acili a e o
eadily obse e he income elas ici y o demand
o he unde lying g oup o goods and se ices.
2.2 A Mo i a ional App oach o
Consume Beha io
Engel’s app oach o consump ion ne e solely
ocused on ood expendi u es. In ac , Engel’s
o iginal con ibu ion was mean o de e mine
and measu e household wel a e by Chai and
Mone a (2010). He s a ed by ca ego izing
expendi u e i ems acco ding o he unde lying
“wan s” hey sa is y. The impo ance o hese
wan s was subsequen ly assessed by he
empi ically de i ed expendi u e pa e ns.
Engel’s wo k hus essen ially ocused on
a beha io al ounda ion o he necessi y-luxu y
axonomy. In a e ised e sion o his o iginal
con ibu ion, Engel (1895) made e en mo e
explici , ha he mo i a ion o human ac ion,
and hus also consump ion beha io , is oo ed
in he sa is ac ion o uni e sally-sha ed needs
(Chai & Mone a, 2010).
To build upon Engel’s legacy, his pape
en iches he classi i ca ion o needs wi h cu en
scien i i c knowledge on he na u e o consume
needs and how hey a e sa is i ed. Howe e ,
mo i a ional unde pinnings o economic
beha io in gene al and consume beha io in
pa icula a e a ely add essed in economics.
Among he exis ing wo ks, wo di e en
explana o y app oaches we e iden i i ed by
Wi (2010). While in he u ili a ian hedonic
app oach he explana ion e e s o he mo i es
o seeking pleasu e and a oiding pain, non-
hedonis ic a ian s ocused on he mo i a ing
powe ha dep i ed needs and wan s ha e o
consump ion ac i i ies.
This pape closely connec s o he
la e app oach. A beha io al-need based–
in e p e a ion o he consump ion mo i a ion
was o e ed by Wi (2001; 2010) o ac ually
heo e ically explain he necessi y-luxu y
dis inc ion ha becomes isible h ough he
shape o Engel cu es. The heo y pos ula es
an in ima e ela ionship be ween human
biological and cul u al e olu ion in he sense
ha cul u al de elopmen is based upon as
well as cons ained by inna e beha io al
disposi ions and cogni i e lea ning abili ies,
which ha e eme ged du ing human phylogeny.
Hence, he heo y ocuses on he explana ion
o long- un economic change om a biological
and psychological pe spec i e (Wi , 2008).
The heo y o he lea ning consume (Wi ,
2001; 2010) emphasizes he ole o human
needs as ul ima e mo i es o consump ion
beha io . The heo y dis inguishes be ween
gene ically de e mined-inna e-needs and bo h
cul u e and socializa ion speci i c acqui ed
wan s, ha esul om p ocesses o associa i e
lea ning (classical and ope an condi ioning)
EM_2_2017.indd 19EM_2_2017.indd 19 14.6.2017 9:29:1614.6.2017 9:29:16

20 2017, XX, 2
Ekonomie
and social-cogni i e lea ning. The heo y holds
he a emp o elie e o educe dep i a ion o
a limi ed numbe o inna e needs, consequen ly
an inc ease in sa ia ion le el o hese needs, is
one majo mo i a ion o consume. Dep i a ion
is hus seen o in insically mo i a e consume s
o ac which c ea es a ewa ding expe ience.
Needs a e he con ingencies unde which
dep i a ion occu s. Al hough needs can be
mani old, in his con ex only he subse o
uni e sally-sha ed “basic” needs i ele an .
Among hese a e ha o sleep, o some hing
o d ink, o some hing o ea , o main aining
body empe a u e, o physical ac i i y, o
s a us ecogni ion, o o senso y a ousal Wi
(2011).
An impo an cha ac e is ic o hese
needs is ha hei sa is ac ion by an ac ion
e ec s a p ima y ein o cemen in he sense
o ins umen al o ope an condi ioning
(S addon & Ce u i, 2003). This, o cou se, has
implica ions o he alloca ion o esou ces.
Imagine indi iduals o be equipped wi h a i xed
se o inna e needs ha show di e en need
dep i a ion s a es. I indi iduals alloca e hei
beha io o ob ain a educ ion o hei dep i a ion
s a es, he likelihood ha a pa icula ac i i y
is chosen o e ano he one depends on i s
ela i e con ibu ion o educing dep i a ion.
Indi iduals a e acco dingly assumed o shi
hei beha io o hose al e na i es which
p o ide he highes a e age ewa d. The
alloca ion o income o consump ion ca ego ies
esul s as p opo ional o he co esponding
need dep i a ion s a es. Unde ein o cemen
lea ning, he equency dis ibu ion o e ac ions
con e ges o a s a e sa is ying he so called
“ma ching law” He ns ein (1997), which seems
o be a good app oxima ion o beha io d i en
by mainly basic need dep i a ion s a es and
ha is cha ac e ized by low le els o cogni i e
in e en ion.
Among he uni e sally-sha ed needs,
a u he dis inc ion ela es o he unde lying
sa ia ion p ope ies hey show Wi (2001;
2010). On he one hand, he e a e basic
needs which ollow homeos a ic ea u es, i.e.,
dep i a ion can be educed ela i ely easily
up o he empo a y sa ia ion poin once ising
income allows o a su i cien inc ease in he
co esponding consump ion expendi u es pe
pe iod o ime. The mo i a ion o consume
is, hen, empo a ily educed o emo ed.
Sa is ac ion o hese needs depends mainly on
he in insic alue o he co esponding goods
and se ices. Examples a e he homeos a ic
needs unde lying o ea ing, d inking, sleeping,
and he main enance o body empe a u e.
On he o he hand, he e a e also basic needs
whe e homeos a ic ea u es a e absen , and
whe e i is he e o e di i cul , i no impossible,
o educe he a e age dep i a ion o ze o.
Typically, hese a e needs whose sa ia ion le el
is de i ned in ela i e e ms, like he need o
a ousal and o social ecogni ion.
Despi e in e pe sonal sou ces o a iance,
which can be expec ed due o indi idual
cogni i e and condi ioning lea ning p ocesses,
i can be conjec u ed, ha sha ed inna e needs
exe some sys ema ic e ec s on beha io ,
ha a e isible a he le el o he popula ion
means, i.e., a he le el o agg ega e consume
expendi u es. As needs di e wi h espec
o he amoun o spending ha is necessa y
o each sa ia ion, his di e ence can be
expec ed o become ele an wi h ising eal
income Wi (2001; 2011). Being able o spend
mo e, consume s should be able o app oach
he sa ia ion le el o some needs as e
han he sa ia ion le el o o he needs. Thei
consump ion mo i a ion is no equally upheld
and hei spending should hus no expand
equally. Di e ences in he income elas ici y o
demand o he p oduc s ha se e he di e en
needs should exp ess his di e en ial sa ia ion
e ec . A o mal model o he di e en ial sa ia ion
e ec s and i s implica ions o Engel cu es has
ecen ly been pu o wa d by Lades (2013).
Taken oge he , he beha io al app oach
o consump ion sugges s connec ing he
di e ences in sa ia ion pa e ns be ween
inna e needs wi h sys ema ic changes in
consump ion expendi u es when income ises.
I is conjec u ed ha , a he le el o agg ega e
expendi u e da a, hese di e ences ansla e
in o di e en income elas ici ies o demand o
p oduc s o g oups o goods and se ices ha
a e likely o be consumed o se e hose needs.
The beha io al app oach o consump ion
should hus be able o explain a good deal o he
di e ences in he shapes o Engel’s cu es and
hus in he income elas ici ies o he unde lying
goods and se ices.
A double-log speci i ca ion o he Engel’s
unc ion has been chosen in o de o es ima e
he expendi u e elas ici y o households by
using an economic s a us o households’ head
a wo k o each household by child en pe
EM_2_2017.indd 20EM_2_2017.indd 20 14.6.2017 9:29:1614.6.2017 9:29:16
21
2, XX, 2017
Economics
pe son. The da a se we e ob ained om he
Slo ak S a is ical o i ce and consis s o he
yea ly obse a ions:
money incomes o p i a e household by
economic s a us o household head a wo k
pe pe son and mon h (€);
money incomes o p i a e household by
child en pe pe son and mon h (€);
money expendi u es o households by using
and economic s a us o household head a
wo k pe pe son and mon h (€);
money expendi u es o households by aim o
using and numbe o child en (€).
The household Budge Su ey o he
Slo ak S a is ical o i ce was used o he pe iod
2004-2014. The use o he household le el da a
o e s he po en ial o iche da ase ha may
o e an addi ional insigh in o he unde lying
economic ela ionships.
A Double-Log
Speci i ca ion has p o en he mos app op ia e
way o es ima ing he expendi u e elas ici y o
demand; i gene a es mo e ealis ic expendi u e
elas ici ies. The gene al model can be w i en
as ollow:
ln wj =αj + βj ln y +ηj (1)
whe e: wj is he a e age annual pe capi a
expendi u e sha e o ood g oup j, αj, and βj
a e he es ima ed coe i cien s, y is he a e age
o al pe capi a income calcula ed as he
a e age annual o al pe capi a expendi u e,
and ηj is he dis u bance e m. As poin ed
ou be o e, he de i a ion o he Engel’s
unc ion assumes cons an p ices. Equa ion
is es ima ed o each o he 13 ood g oups
o each household by child and by economic
s a us o household head. We ha e o include
dummy a iables.
We ha e supposed he e a e di e ences
in he elas ici y o each ood g oup among
se e al ypes o households.
Households’ Classi i ca ion
Analysis o he income elas ici y was
de e mined in 2,418 Slo ak households.
Di e en ypes o households we e classi i ed
based on he economic s a us o he household
head (household o employees, sel -employed
household, household o pensione s and
o he s). Fo be e o ien a ion i is essen ial o
cha ac e ize he household ypes as de i ned
by he S a is ical O i ce o he Slo ak Republic:
Economic s a us o household head was
cha ac e ized by his/he employmen s a us.
Employee: a pe son, who wo ks o
a public o p i a e employe , and who ecei es
compensa ion in he o m o wage o sala ies,
including pensione s wi h income om
employmen and co-ope a i e membe s.
Sel -employed pe son: wo ks in hei own
business, including pensione s wi h income
om own business.
Pensione : a pe son wi hou job, who
ecei es e i ed pension, wi h no income om
job o business; in household could li e also
o he pe sons wi hou old-age pension.
O he s: all pe sons, which we e no
included he ein be o e (unemployed, ma e ni y
o pa e ni y lea e, s uden s, e c.).
3. Resul s and Discussion
3.1 Analysis o he Income Elas ici y
o Demand
Quan i y demanded sensi i i y o changes
in income, ce e is pa ibus, was measu ed
by he coe i cien o income elas ici y. The
income elas ici y o demand is he a io o he
pe cen age change in quan i y demanded
p oduc X o pe cen age change in income,
and shows how many pe cen will change
he demand o p oduc X i he e is 1 pe cen
change in consume income. Fo no mal goods
he income elas ici y is posi i e. As we deepen
ou classi i ca ion o goods o essen ial goods,
he 1% change in consume ’s income caused
less han 1% change in demand o he goods.
Because he sha e o he goods on a o al
income dec eases, he a e age p opensi y o
consume is dec easing and ue: 0 ≤ Eid ≤ 1.
Analysis o he income elas ici y was
in es iga ed o each ype o households
by numbe o dependen child en and o
households by economic s a us o he
household head.
F om he Tab. 1 i could be iden i i ed ha
he calcula ed elas ici y we e highly signi i can .
All ood g oups ha e explained a iabili y
o e 90%. Almos e e y elas ici y eached he
posi i e alue, excep hese o mea and oils
and a s. This means, ha all he ood g oups
wi hin he in e al 0 ≤ β ≤ 1 a e he Slo ak
households wi hou child en needs. 1% change
in he consume ’s income esul s in a change
in demand o he good which is less han 1%.
EM_2_2017.indd 21EM_2_2017.indd 21 14.6.2017 9:29:1614.6.2017 9:29:16
22 2017, XX, 2
Ekonomie
The highes alue o he elas ici y was
ound in case o ege ables, including po a oes.
I we ha e inc eased he e enue by 1%,
he demand changed by 0.66%. So d inks,
co ee, ea, cocoa, and mine al wa e ha e
ela i ely simila le els o elas ici y a he le el
o 0.5%. Fish, milk, cheese, and eggs showed
he elas ici y a ound 0.2%. The consump ion
o hese p oduc s is ela i ely li le a ec ed
by he change o income. We ha e ocused
on nega i e elas ici y mainly. Ve y sensi i e
commodi y was he mea . F om a nu i ional
poin o iew his is an impo an ood, and in
i nancial e ms, i ep esen s one o he mos
expensi e ood o he Slo ak households.
This ac was indica es by he elas ici y alue
-0.08. 1% change in income will su ely esul s
in change o consume p e e ences o mea by
-0.08%. Fa s & oils ha e e en mo e nega i e
elas ici y alue, eaching -0.22% only. In case
o households wi hou child en he needs
o goods such as mea , oil & a s we e only
in e io , demand o hem dec eases wi h an
inc easing income.
Fig. 1 shows he di e ences in e i emen
elas ici y o households acco ding o numbe
o child en. The e is a signi i can di e ence
be ween households wi h child en and
households wi hou hem. The numbe o
child en pe household is no he mos impo an
ac o o a change in e i emen elas ici y.
The analysis o a iance among he g oups
o households s udied shows ha he null
hypo hesis H0 canno be ejec ed: All popula ion
Household wi hou child en Household wi h
1 child
Household wi h
2 child en
Household wi h
3 and mo e child en
αβP ob R2 EID αβ EID αβ EID αβ EID p ob R2
B ead &
ce eals -1.04 0.55 1.39E-15 0.982 necessa y
goods -1.38 0.75 necessa y
goods -1.38 0.81 necessa y
goods -1.38 0.93 necessa y
goods 1.23E-17 0.96
Mea 1.28 -0.08 7.67E-16 0.983 in e io
goods 0.43 0.37 necessa y
goods 0.43 0.26 necessa y
goods 0.43 0.22 necessa y
goods 1.77E-15 0.93
Fish -2.18 0.21 4.96E-18 0.991 necessa y
goods -2.48 0.5 necessa y
goods -2.48 0.4 necessa y
goods -2.48 0.35 necessa y
goods 2.24E-16 0.94
Milk, cheese &
eggs 0.06 0.29 9.93E-12 0.949 necessa y
goods -0.77 0.55 necessa y
goods -0.77 0.54 necessa y
goods -0.77 0.54 necessa y
goods 7.07E-14 0.91
Oil & a s 0.13 -0.22 7.33E-14 0.972 in e io
goods -0.21 0.23 necessa y
goods -0.21 0.1 necessa y
goods -0.21 0.1 necessa y
goods 2.86E-09 0.8
F ui s -1.95 0.3 5.44E-13 0.964 necessa y
goods -1.67 0.44 necessa y
goods -1.67 0.36 necessa y
goods -1.67 0.29 necessa y
goods 2.51E-12 0.88
Vege ables
incl. po a oes -3.3 0.66 1.17E-10 0.932 necessa y
goods -3.6 0.92 necessa y
goods -3.6 0.88 necessa y
goods -3.6 0.94 necessa y
goods 1.70E-11 0.87
Suga , jam,
honey,
chocola e &
con ec ione y
0.19 0.01 6.01E-13 0.964 necessa y
goods 0.23 0.2 necessa y
goods 0.23 0.14 necessa y
goods 0.23 0.1 necessa y
goods 1.25E-09 0.81
Co ee, ea &
cocoa -3.11 0.5 2.48E-14 0.975 necessa y
goods -3.22 0.7 necessa y
goods -3.22 0.67 necessa y
goods -3.22 0.66 necessa y
goods 1.52E-15 0.93
Mine al
wa e s, juices
& o he
non-alcoholic
d inks
-2.18 0.59 6.77E-11 0.936 necessa y
goods -3.07 0.68 necessa y
goods -3.07 0.68 necessa y
goods -3.07 0.58 necessa y
goods 1.73E-20 0.97
Alcoholic
be e ages &
obacco
-1.86 0.47 4.88E-14 0.973 necessa y
goods -1.86 0.58 necessa y
goods -1.86 0.42 necessa y
goods -1.86 0.29 necessa y
goods 1.63E-16 0.95
Alcoholic
be e ages -2.38 0.35 7.13E-17 0.987 necessa y
goods -2.47 0.58 necessa y
goods -2.47 0.54 necessa y
goods -2.47 0.46 necessa y
goods 9.65E-15 0.92
Sou ce: own calcula ions
Legend: α-in e cep , β- eg ession coe i cien , EID-income elas ici y o demand, p ob.-p obabili y alue, R2-coe i cien o
de e mina ion
Tab. 1: Elas ici y o households acco ding o numbe o child en pe pe son and mon h
in 2004-2014 (in €)
EM_2_2017.indd 22EM_2_2017.indd 22 14.6.2017 9:29:1614.6.2017 9:29:16
23
2, XX, 2017
Economics
wi h ega d o elas ici y is equal (p- alue =
0.14738). The e o e, he e is no s a is ically
signi i can di e ence among he households
acco ding o numbe o child en.
Analysis o he ela ionship be ween
models o consume demand based on mic o
and agg ega e da a we e p o ided by Blundell
e al. (1993). Acco ding o hei i ndings i
is impo an o es ablish he p esence o
nonlinea i y in he mic o-le el Engel’s cu es
and he need o in e ac ions wi h household-
speci i c cha ac e is ics, since ei he o hese
would ule ou simple linea agg ega ion. In ou
sample, pooled o e 10 yea s, we ha e ound
s ong e idence o bo h.
Simila o ou esul we e he i ndings o
he oods u model desc ibed by Chai and
Mone a (2010), in which he p ices o co n and
ui s & ege ables posi i ely a ec income;
he p ices o dai y p oduc s a ec s he income
nega i ely. In he wage income model on he
o he side he elas ici y o co n was he same
as in p e ious models; he elas ici y o dai y
p oduc s was signi i can ly nega i e, bu smalle
in absolu e alues (-0.58 s. -1.41, and -1.10);
and he elas ici y o ui s & ege ables was no
longe s a is ically signi i can . The e we e mino
di e ences in he es ima es o he demand
elas ici y ac oss he models.
Income elas ici y was sligh ly abo e he
le els o cheese & gible s, and no ably abo e
he alues o bo ine (1.43), o he ce eals
(1.37), and mu on (1.50). Income elas ici y
alls be ween 0.5 and uni y o i sh (0.56), b ead
(0.64), eggs (0.66), ice (0.74), yogu (0.75),
milk (0.79), poul y (0.87), a s (0.88), dough
p oduc (0.95), and oils (0.98). Ou income
elas ici y o b ead cons i u es he lowe limi
o ea lie es ima es, which ange om 0.65 o
0.85, while income elas ici ies o mea , mea
p oduc s, dai y p oduc s, and eggs we e simila
o hose epo ed by Hes e al. (2008), Lades
(2013), and Wi (2001; 2011).
The es ima ion esul s indica e ha he
o al pe capi a expendi u e and he household
size ha e signi i can ly nega i e es ima es in
bo h g oups o households. The es ima e o
emi ances is posi i e and signi i can only
in he g oup o ich households, so when he
emi ances inc ease, households abo e
he po e y line inc ease hei sha e o ood
consump ion Na e (1990).
Households wi h 1 child has he highes alue
o he elas ici y o ege ables including po a oes
and b ead and ce eals. I we inc eased e enue
by 1%, he demand o ege ables inc eased by
0.92% and he demand o b ead and ce eals
should be inc eased by 0.75%. The lowes
Fig. 1: Box plo o elas ici y o households acco ding o numbe o child en
Sou ce: own
EM_2_2017.indd 23EM_2_2017.indd 23 14.6.2017 9:29:1614.6.2017 9:29:16