Baku. Vahab Rzayev – APA-Economics. According to analysis and researches conducted by the Central Bank of Azerbaijan, change of financial wealth level of household in the country significantly influences the consumption, said the “Research Bulletin” of the Central Bank of Azerbaijan.
Results of the analysis indicate that 10%-growth of the deposits increases consumption by 1.8%. However, it was not determined that change of property wealth level did not significantly influence the consumption. At the same time, according to the results, 10%-growth of income causes households to increase the consumption by 4.8%. Assessment of error rate was negative and statistics. This indicates that household consumption returns to its balanced level after short-term shocks and 1.6 month.
Note that assessment of the wealth effect allows determining impact of household financial and property wealth on consumption. So, increase of household assets gives rise to wealth effect (financial and property wealth effect) through consumption. Therefore, though the income in the disposal is the main factor of household consumption, usage of financial and property wealth channels is important in the preparation of effective contracyclical policy.
As a whole, studying of factors influencing consumption is important over for two reasons. First reason is that consumption expenditures of household has a large share in
The research says the wealth effect has been assessed on the basis of vector error correction model. In accordance with the statistical limits, financial wealth of household was replaced with their savings, property wealth – with average price of 1 m² of the apartment in the secondary market. In the assessment, statistical data from January, 2007 to July, 2013 has been used.
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