Relative Income in Durable and Non-Durable Consumption Function: Cross-Sectional Study

Kód výsledku v IS VaVaI

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Výsledek na webu

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DOI - Digital Object Identifier

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Jazyk výsledku

angličtina

Název v původním jazyce

Relative Income in Durable and Non-Durable Consumption Function: Cross-Sectional Study

Popis výsledku v původním jazyce

Since the life cycle hypothesis the consumption theory has been understood as the theory of utility streaming from consumption of goods and services at the time of its purchase. In this sense the consumption of durable goods is actually not a con-sumption, but rather a kind of investment. Although this statement seems to be clear and logic, for the sake of simplicity many empirical studies ignore this fact and assume the same structural patterns for both durable and non-durable con-sumption function. But can we actually simplify household consumption behaviour that much at the first place? Does this equivalence hold also for the interdependent concept of consumption and utility? The aim of this work is to make a little contribution in answering these questions by estimating the consumption functions of durables and non-durables separately focusing on the influence of relative income. The regression analysis of the cross-sectional dataset of Czech households reveals that while relative income is the key determinant of non-durable consumption function, its influence is strongly insig-nificant in the durable consumption behaviour. This finding implies that interde-pendent nature of consumption truly holds only for the situations where the utility is gained at approximately the same time as the related consumption.

Název v anglickém jazyce

Relative Income in Durable and Non-Durable Consumption Function: Cross-Sectional Study

Popis výsledku anglicky

Since the life cycle hypothesis the consumption theory has been understood as the theory of utility streaming from consumption of goods and services at the time of its purchase. In this sense the consumption of durable goods is actually not a con-sumption, but rather a kind of investment. Although this statement seems to be clear and logic, for the sake of simplicity many empirical studies ignore this fact and assume the same structural patterns for both durable and non-durable con-sumption function. But can we actually simplify household consumption behaviour that much at the first place? Does this equivalence hold also for the interdependent concept of consumption and utility? The aim of this work is to make a little contribution in answering these questions by estimating the consumption functions of durables and non-durables separately focusing on the influence of relative income. The regression analysis of the cross-sectional dataset of Czech households reveals that while relative income is the key determinant of non-durable consumption function, its influence is strongly insig-nificant in the durable consumption behaviour. This finding implies that interde-pendent nature of consumption truly holds only for the situations where the utility is gained at approximately the same time as the related consumption.

Druh

D - Stať ve sborníku

CEP obor

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OECD FORD obor

50200 - Economics and Business

Projekt

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Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2019

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název statě ve sborníku

MME 2019 : 37th International Conference on Mathematical Methods in Economics 2019 : conference proceedings : České Budějovice, September 11-13, 2019

ISBN

978-80-7394-760-6

ISSN

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e-ISSN

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Počet stran výsledku

6

Strana od-do

185-190

Název nakladatele

Jihočeská univerzita v Českých Budějovicích

Místo vydání

České Budějovice

Místo konání akce

České Budějovice

Datum konání akce

11. 9. 2019

Typ akce podle státní příslušnosti

CST - Celostátní akce

Kód UT WoS článku

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