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

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  • Ligia Prodan

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.

Suggested Citation

  • Ligia Prodan, 2015. "Econometric Analysis Model of the Correlation between Final Consumption and Gross Disposable Income," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 5(3), pages 50-57, July.
    • Handle: RePEc:hur:ijaraf:v:5:y:2015:i:3:p:50-57
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    1. repec:dau:papers:123456789/7463 is not listed on IDEAS
    2. Bardsen, Gunnar & Eitrheim, Oyvind & Jansen, Eilev S. & Nymoen, Ragnar, 2005. "The Econometrics of Macroeconomic Modelling," OUP Catalogue, Oxford University Press, number 9780199246502, Decembrie.
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