In this paper, consumption expenditure is used interchangeably with household spending, just as cross-cultural
dynamics and social globalization. Given that the purpose of this research is in two fold – one to investigate the
impact of the selected variables on household spending, and two, to explore the interactions of selected variables
with domestic household spending. Hence, we have employed the Granger causality test based on a Vector
Autogresssive (VAR) model for the empirical analysis. The motive behind this study is not only to investigate the
nexus between household spending and macroeconomic variables but also to determine the connections between the
KOF social globalization index and household consumption expenditure in the Czech Republic, which to the best of
our knowledge there is no such study in the Czech Republic, hence, the relevance of this paper.
This paper is organized as follows: Section 1 presents an introduction and some empirical evidence related to
household spending in various countries, Czech Republic included. The literature review with descriptive analysis of
Czech household income, savings and expenditures is presented in section 2 while section 3 covers both research
methodology as well as the empirical results and interpretations. Finally, section 4 concludes the study