EXAMINATION OF THE IMPACT OF HOUSEHOLD INCOME ON EXPENDITURE ON CLOTHING AND FOOTWEAR IN BOSNIA AND HERZEGOVINA AND SERBIA
EXAMINATION OF THE IMPACT OF HOUSEHOLD INCOME ON EXPENDITURE ON CLOTHING AND FOOTWEAR IN BOSNIA AND HERZEGOVINA AND SERBIA

Summary/Abstract: The subject of this research is the examination of the impact of household income on expenditure on clothing and footwear in Bosnia and Herzegovina and Serbia. Our aim is to quantify the impact of income as the main explanatory variable as well as of selected socioeconomic and demographic household characteristics on expenditure of Bosnian and Serbian households on clothing and footwear. This research is based on data obtained from the 2015 Household Budget Surveys in Bosnia and Herzegovina and Serbia. The surveys were carried out using the uniform methodology developed by the Statistical Office of the European Union (EUROSTAT). Apart from the descriptive analysis which includes a comparative overview of the structure of household expenditure in Bosnia and Herzegovina and Serbia in the observed year, this paper also uses some classical statistical methods and methodological instruments as components of econometric analysis based on a model formulated as a single linear regression equation and other functional forms of Engel functions which, by applying adequate transformations, can be reduced to a linear form. The impact of household income on expenditure on clothing and footwear was examined by means of six different functional forms of Engel's demand equations. The socioeconomic and demographic household characteristics were introduced into the classical linear regression model by means of dummy variables whose impact was quantified both separately and in interaction with income, as the main explanatory variable. The results of this analysis are a reflection of estimates of the significance of the impact that household income has on the share of expenditure for the observed group of products in the overall household expenditure as well as the estimates of the impact of socioeconomic and demographic factors, estimates of Engel elasticity and other sample indicators relevant for the testing of the initial research hypothesis.

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