Consumer Demand for Wine and Beer in the Czech Republic, and Their Mutual Influences

Abstract

The paper analyses consumer demand for wine and beer in the Czech Republic in the period of 1991–2013. The objective of this research was to evaluate the elasticity of consumption of wine and beer in reaction to a change of prices and further to a change in the level of a household income. Based on the dynamic models of the gross demand for wine and beer there were determined the coefficients of direct and cross price elasticity, and income elasticity coefficients. In accordance with the identified sizes, respectively, after evaluating their statistical significance, there was carried out the economic analysis of observed demand functions. Analysis of demand functions has shown that the consumptions of wine and beer by the Czech households were not linked on a statistically significant level, in the examined period. Dynamic model of the gross demand for wine showed a statistically insignificant sensitivity of wine consumption to a change of the household income. Wine consumption of Czech households was significantly formed only by its price. Dynamic model of the gross demand for beer has shown that beer consumption by the Czech households responded significantly only to change in household income. Whereas in the case of wine, there was identified an influence of previous consumption on the current one, this was not confirmed in the case of beer.