Between Transition and Enlargement: The Composition of Consumption in European Households

Abstract

The article aims to specifically consider the effect of the enlargement of markets, resulting from the process of transition in Central and Eastern European countries, on the structure of household consumption. On the basis of a discriminatory analysis performed on recent data published by OECD and Eurostat, this study proposes to address three main questions: if during transition the household consumption patterns, measured by budget shares, have changed; if from this point of view, Central and Eastern European countries are similar between them and diverge from Western ones; if today there are any signs of convergence between the two groups of countries. The dissimilarity in budget share in Eastern and Western countries is proven and persistent, appearing greater in real terms than in nominal ones. On the one hand, Engel’s law is confirmed, given that at lower income levels the percentage of food consumption is greater, even though in real terms the absolute level of consumption of food has, in most cases, been reduced. On the other hand, the historical experience of Eastern countries is evident in the prolonged productive-distributive role of the State, especially in the field of essential services: home, schooling, and health.