Research of Household Expenditure for Food and Non-Alcoholic Beverages in the Republic of Croatia

The aim of this paper is to investigate household spending by income deciles. Only the most important one among the expenditure categories was considered, food and non-alcoholic beverages. Research and analysis were based on the results of the Questionnaire on Household Expenditure in the Republic of Croatia. Adequate mathematical and statistical models of expenditure for food and non-alcoholic beverages by income deciles were established. The defined models were used in further research to calculate the coefficient of elasticity. The research showed that expenditure for food and non-alcoholic beverages is non-elastic, thus confirming the first Engel’s law. The obtained results can be used in planning household expenditure also in future periods, considering the fact that the model of expenditure by income deciles referring to the period 200 – 2009 was developed. A model for measuring elasticity was constructed as well. It refers to a 10-year period and can be used to forecast future coefficients of elasticity