Household budget: Impacts of incomes on consumption
Household budget: Impacts of incomes on consumption

Summary/Abstract: This research purpose is to explain the relation between several types of income and total personalconsumption. Based on research method used, which is descriptive and regression analyses, the highinfluence of incomes on consumption is proven. Through various statistical results, it is shown in whichextent the correlation is relevant and how it is concluded that the chosen variables are sufficient to explainthe variation of the level of consumption through time. The main goal of this research is to discover what liesbehind consumption and to understand the households as main consumption units on the market. Gainedresults are based on data analysis, in which the independent variables are “Income from pension insurance,”“Income from property”, “Income from small business” and “Wages and salaries,” while the dependentvariable is “Personal consumption”. After testing all assumptions of linear regression and conducting theentire analysis, it is concluded that every independent variable is good in explaining the value of thedependent variable “Personal consumption”. The statistical unit on which the analysis is based is ahousehold, so statistics shown in this research are useful for understanding the essence of a budget inhousehold economies.

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