engleski

Engel's laws and the movement of relative shares of clothing and footwear expenditures in Croatia

Clothing and footwear, as well as food and beverages expenditures can be regarded as essential consumption of the population. This consumption is almost symbiotically connected to the height, structure and the direction of movement of the household income on the national level. The intensity and dynamics of this interdependence in consumption and income vary in different world's economies, which can also be applied for Croatia. Since the consumption and income dependence of these two groups of civilization products are defined by Engel's law, this paper aimed at economically examining their functioning in our society. The paper also deals with quantifying the income elasticity of clothing and footwear consumption in a household. The comparative analysis of income elasticity coefficients will be carried out in order to identify the tendency of commonalities or differences in the intensity and the structure of food and beverages consumption, as the second most essential products group considering the same income level. The four Engel's laws, which are empirical in nature, turned out to be unreliable in some countries, such as the USA, the country of the highest financial solvency, while in the countries of lower income levels these laws are still in existence. The main issue of this paper is to identify an average household income level when the relative sluggishness of household clothing and footwear expenditures increases in accordance with income increase in Croatia. The three levels of the household income influence on levels and structures of consumption analysed here are the following: sluggishness, elasticity and changes in quantitative-qualitative structure of consumption and inelasticity of the essential products. The calculation of these parameters and possible deviation from these empirical norms should serve in the exact forecasting of consumption expenditures, primarily for clothing and footwear and comparatively for food and beverages.

Engel’s laws, clothing and footwear, expenditures, Croatia

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