The paper has investigated the impact of some selected variables (e.g. Net disposal income, GDP per capita
growth, inflation rate, cross cultural dynamics) on household spending (proxies for DFHCE) in the Czech Republic,
using Granger causality test based on a Vector Autogresssive (VAR) model.
The empirical results show that net disposable income, cross-cultural dynamics, inflation rate, and household
saving rate have a significant relationship with household spending in the Czech Republic within the period under
study (1993–2012). In addition, the Granger causality analysis also provides a positive relationship between
household spending and social globalization index (a proxy for cross-cultural dynamics). The results equally
indicate bidirectional causality between household saving rate and household spending as well as between the
inflation rate and household spending. On the contrary, there is a unidirectional Granger causality running from
household spending to both net disposable income and GDP per capita growth. Notwithstanding, both disposable
income and G