ECONOMIC ANALYSIS OF THE RELATIONSHIP BETWEEN GROSS NATIONAL INCOME AND CONSUMPTION OF BRAZILIAN FAMILIES IN THE PERIOD 2000 TO 2017

Abstract

The relationship between consumption and income is called the consumption function, through which it is possible to observe the effect of a variety of income on household consumption. In this sense, the article is an econometric study aiming to estimate and analyze the consumption function, describing the effects that an increase in income has on the consumption of Brazilian families. The econometric model used for data analysis was a simple linear regression. The research is quantitative in nature and was conducted by collecting secondary data provided by the Brazilian Institute of Geography and Statistics (IBGE). The results indicate that the increase of one real in Gross National Income causes, on average, an increase of about R $ 0.64 cents in household consumption, more precisely in the component of household consumption expenditure. Thus, it is concluded that if the marginal propensity to consume is 64%, then the marginal propensity to conserve households is 36%.