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Asif  Alıyev: Forecasting of Engel Curve Components with the Application of ARIMA Method








































                    Figure 1: Forecast results of Engel Curve components between 2022-2026

                    Figure 1 information helps to infer that forecast results of household income, expenses
                    and expenses on food will inrease in line with the trend lines. But, only household
                    expences will go below the trend line.

                    CONCLUSION
                    In this paper Engel curve componenets are forecasted for 2022-2026 period with the
                    application of ARIMA method. Engel curve as an express analytical and practical tool
                    is effective to get some information about wellbeing and consumption patterns of
                    households in the country. Despite that this methodology doesn’t take into account
                    consumption  behaviour,  changes  in  household  income,  changes  in  quality  of
                    consumption  goods, mentalities and other factors, it is still applicable to get an overall
                    picture about median household consumption structure on food. Since Engel curve is
                    not  applied  to  all  income  groups,  the  forecasted  data  correspond  only  to  median
                    households in the country. ARIMA time series forecasting model is one of the widely
                    used econometric methods in this regard to predict average change. The obtained
                    results can be useful for decision-making in socio-economic sectors.



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