On the Price and Income Elasticity of Consumption in EU Economies
On the Price and Income Elasticity of Consumption in EU Economies
Author(s): Petar SorićSubject(s): National Economy, Supranational / Global Economy, Business Economy / Management, Micro-Economics, Financial Markets, Socio-Economic Research
Published by: SAV - Slovenská akadémia vied - Ekonomický ústav SAV a Prognostický ústav SAV
Keywords: demand elasticity; consumption; time-varying parameters model; demand function;
Summary/Abstract: While marketing literature extensively studies consumption's responsiveness to price changes, macroeconomic perspectives on household expenditure elasticity are limited. This pan-European analysis examines price and income elasticities for various non-durable and semi-durable goods. Income elasticities consistently exceed price elasticities across consumption categories. A state-space model accounts for time-varying elasticities, revealing their independence from the business cycle across countries and categories. Consumption trajectories show secular trends and insensitivity to transitory shocks.
Journal: Ekonomický časopis
- Issue Year: 73/2025
- Issue No: 05-06
- Page Range: 210-230
- Page Count: 21
- Language: English
