Economic growth and housing spending within social protection: Correlation and causal study

  • Received June 1, 2023;
    Accepted June 30, 2023;
    Published July 5, 2023
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/pmf.12(1).2023.07
  • Article Info
    Volume 12 2023, Issue #1, pp. 73-85
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This work is licensed under a Creative Commons Attribution 4.0 International License

The purpose of this study is to ground the causality, its character, and power between economic growth and housing spending within government social protection to strengthen poverty reduction. The study is conducted on a sample of 27 EU countries for 2012–2021 according to the following indicators: government expenditure on housing within social protection, government expenditure on housing development, and GDP per capita growth. Correlation analysis revealed the relationship between the variables. The paper employed time lags with the most significance based on Pearson and Spearman correlation coefficients depending on normal data (Shapiro-Wilk test). The causal analysis determined which of the studied indicators is the cause and consequence of established dependence based on the results of the Granger test. Calculations are made in STATA software. It is confirmed that government expenditure on housing within social protection influences GDP per capita growth in 14 countries (the highest impact is in Greece and Spain) and government expenditure on housing development – in 17 countries (the biggest influence is in Romania, the Slovak Republic, Ireland, and Lithuania). It is also emphasized that government expenditure on housing development influences economic growth more significantly and with higher strength than government expenditure on housing within social protection. The obtained results can be useful in further research and government decision-making in social and economic policy, particularly regarding the expediency of increasing government spending for affordable housing and its development according to social protection programs, poverty reduction, and inclusive economic growth.

Acknowledgments
The study is funded by the Ministry of Education and Science of Ukraine (No. 0122U000781) and the Vega Agency (No. 1/0638/23).

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    • Figure 1. Cross-country analysis of shares of government expenditure on housing in the spending block of social protection in 2021
    • Figure 2. Cross-country analysis of shares of government expenditure on housing development in the spending block of housing and community amenities in 2021
    • Table 1. Normal data testing based on the Shapiro-Wilk methodology
    • Table 2. Pearson/Spearman correlation calculations
    • Table 3. Granger test for causality
    • Table 4. Determination of unidirectional or bidirectional causality based on Granger test results
    • Conceptualization
      Svitlana Zhuchenko, Zuzana Kubaščikova, Anastasiia Samoilikova, Tetiana Vasylieva, Iryna D’yakonova
    • Data curation
      Svitlana Zhuchenko, Iryna D’yakonova
    • Formal Analysis
      Svitlana Zhuchenko
    • Investigation
      Svitlana Zhuchenko
    • Methodology
      Svitlana Zhuchenko
    • Resources
      Svitlana Zhuchenko, Zuzana Kubaščikova, Tetiana Vasylieva, Iryna D’yakonova
    • Software
      Svitlana Zhuchenko, Anastasiia Samoilikova
    • Validation
      Svitlana Zhuchenko
    • Visualization
      Svitlana Zhuchenko
    • Writing – original draft
      Svitlana Zhuchenko
    • Writing – review & editing
      Svitlana Zhuchenko, Zuzana Kubaščikova, Anastasiia Samoilikova, Tetiana Vasylieva, Iryna D’yakonova
    • Funding acquisition
      Zuzana Kubaščikova
    • Project administration
      Anastasiia Samoilikova
    • Supervision
      Tetiana Vasylieva