Econometric Analysis Model of the Correlation between Final Consumption and Gross Disposable Income

Ligia Prodan ()

International Journal of Academic Research in Accounting, Finance and Management Sciences, 2015, vol. 5, issue 3, 50-57

Abstract: This article highlights the effective possibilities for the use of linear regression model to analyze the evolution of final consumption. In this context, I consider this indicator as a dependent variable, whose variation is significantly determined by the evolution of gross disposable income as a parameter of social and economic life of a country. To emphasize the practical aspects related to the use of linear regression in macroeconomic analysis we developed a practical study in which we defined as independent variable gross disposable income in the economy of Romania, in the period 1990-2014. Data on a yearly frequency was used, and to ensure data comparability I have deflated it, taking as a basis the year 1990. The objectives of this analysis is to determine the function that best describes the relationship of the two indicators, observing the relation that is established between them and estimating an valid and statistically significant econometric model.

Keywords: Final consumption; gross disposable income; regression; model; variable (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:hur:ijaraf:v:5:y:2015:i:3:p:50-57

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