Abstract:

The aim of this paper is to analyse the level of household expenditure on food and superior goods in the European Union countries. The research is based on expenditure data on these goods in the period of 1996 - 2017 in 27 European Union countries (excluding Croatia). When the society becomes wealthier, the overall consumption increases and the spending structure of households changes. Therefore, the analysis covers the changes in the level of expenditure and their equalization. Higher goods include expenditure on restaurants and hotels as well as expenditure on recreation and culture. In order to assess the consumption possibilities of households, the Workinga demand model was estimated for each country for both groups of goods and boundary values for the level of expenditure on food and superior goods were determined. In addition, income elasticity of demand for both types of goods was calculated in order to identify their nature. Then, the paper proceeds with the analysis of convergence process of EU households spending using the dynamic β-convergence model based on panel data with constant effects. The study only considered the absolute convergence approach.