The Convergence of Household Consumption Expenditure Structure: Implications on Environmental Impact in Lithuania

Abstract

The aim of this study is to examine Lithuanian household consumption changes, their convergence within the EU-15 and implications for the environmental impact. During the period of 1995-2007 the household consumption in Lithuania rose up 2.7 times. Substantial growth of consumption expenditure was observed to luxuries such as recreation, culture, education, while the slowest growth - to necessities such as food and housing. During the analyzed period Lithuania converged towards the Old Member States by two thirds of the household consumption structure categories. Response of the most consumption categories considered as necessities (food, housing, etc.) to growth of the income was inelastic i.e. consumption in these categories grew up slower than the income. On the contrary, elastic response of consumption categories considered as luxuries (recreation and culture, miscellaneous goods and services, education) to the income increase was characteristic i.e. their consumption grew up faster than the income. Whereas, during the period of 1995-2007 the biggest growth of consumption was characteristic of both the consumption categories with lower environmental impact, referring to the EEA (2010) emission intensities calculation and the changes in consumption structure which decelerated an increase in emissions of greenhouse gases by 19 %, and acidifying compounds by 6 %.

DOI: http://dx.doi.org/10.5755/j01.erem.60.2.1198