Analysis of Flowers Production and Consumption Determinants in Czech Republic

Abstract

The paper deals with an analysis of economic factors which affect production and consumption of flower branch products. It answers scientic questions set on base of the fact that this branch started to get in a centers of attention and experiences growth again. The paper uses both the linear and the nonlinear regression models results of which are instrumental to recognition of practical problems in the monitored area. The most important surveyed factor influencing the production appears an amount of covered areas used for growing. The use of this production factor was decreasing till 2004; only in the following period growing areas have been enlarged. Despite the fact the decrease in covered space leads to an increase in production thanks to growing intensification of the production. Subsidies to farmers provided by the European Union in a form of direct payments SAPS affect the production positively, however, with a lower sensitivity than the intensively used growing area. Basic determinants of the flower consumption monitored in expenditures for the flowers are among others the price and the income. Because a significant part of the price is the value added tax the VAT rate was used as a representative explanatory variable. Its change will influence the consumption with a lower sensitivity than the variable of the income. In the last part of the paper, a behaviour of consumers divided in groups according to amount of income was analyzed. A saturation level was determined in the commodity flowers in consumers in a salaried employment in 2010.