Estimating interaction between income and expenditures for food and non-alcoholic beverages in Slovakia

The main aim of the paper is to evaluate the relationship between incomes and expenditures for foodstuff categories, the level, and structure of expenditures and next statistical evaluation of their interaction. Budget shares and elasticity coefficients were estimated for food and non-alcoholic beverages consumption for the individual household categories according to the economical activity of head during the period 2004-2012. Using the aggregate data, we estimate the elasticities on income and price for the food demand in Slovakia. Knowing the values of demand elasticities for food is widely used approach to correct trade policy making and analysing trade patterns.