This essay examines the influence of income differentiation on private cons
umption. The author illustrates how to derive the total demand on individua
l goods from curves describing the income differentiation within the popula
tion (e.g., Lorenz) and the Engel curve. This model is later used to determ
ine the differences in the expenditure structure of the employee households
in the (Czech Republic between the years 1988 and 1996 as a result of chan
ges in income distribution (ceteris paribus). The author demonstrates that
increases in income differentiation leads to increased expenditures on cars
, houses, flats, and an overall growth of savings, On the other hand, it al
so leads to a decline in expenditures on nourishment, clothing, etc. The au
thor also addresses the difficulties associated with the models' applicatio
n (e.g., problems with deriving the Engel curve).