H31 - Fiscal Policies and Behavior of Economic Agents: HouseholdReturn

The objective of this paper is to examine one of the essential behavioural concepts - the 'status quo bias' - on the available macroeconomic data. The recent global economic crisis has provided a valuable opportunity for analysing the concept and ensured that relevant and sufficient inputs for such academic research are available. Specifically, to study the 'status quo bias', this paper studies the relation between consumption and income before and after the 2008 economic crisis in a selected country. As such, this study attempts to provide answers to such questions as: How strongly is consumption dependent on income prior to and after the crisis? What are the forces behind consumption during the assessed period - income or existing quality of living? What conclusions can be drawn for public finance from the analysis? The findings indicate that the 'status quo bias' behavioural concept could be confirmed based on the tested macroeconomic data, and possible implications for public finance are presented as well.

Income, expenditure and similar variables in monetary units tend to have distributions similar to log-normal. Description of such variables after logarithmic transformation by the normal model is often not accurate enough, especially for multivariate data. Deviations of their empirical distributions from the theoretical lognormal distribution often require more sophisticated analysis. Mixtures represent a very flexible way of reconstructing complex distributions with irregular features and are suitable for detailed modelling. Multivariate mixture models are applied to the Czech longitudinal survey of household income in the European Union Statistics on Income and Living Conditions (EU-SILC) in 2005-2008. The analysis identifies distinct patterns of progression of income, with a high percentage of households having steady annual increases over the four years (three transitions). Graphical presentation of the results is emphasised.

The paper presents the development of monthly gross wages and wage distributions both by gender groups and for the total sample in the Czech Republic over the years 2002-2009. The first part deals with the development of sample characteristics of the level, differentiation and shape of the wage distribution in the research period, including characteristics of wage level forecasts for 2010 and 2011. Special attention is paid to the different behaviour of the wage distribution between men and women in the Czech Republic and the gender dependence of gross monthly wages. A comparison of the income level development in the Czech Republic with that of the other European Union countries in 2005-2009 is made in the final part of the paper. The comparison is drawn in relation to the income level development both in the original fifteen EU countries and the twelve newly-accepted EU member states.