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Economies Of Scale In Household Consumption: With Application To Australia

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  • NANAK KAKWANI
  • HYUN H. SON

Abstract

This paper presents a general framework for defining the economies of scale in household consumption. It allows commodity specific economies of scale (taking into account the substitution effects). The chief contribution of the paper is to show how one can estimate economies of scale from cross section budget data without price information. The problem of identification that is inherent in these models is overcome by making use of some assumptions about the nature of goods and services employed in the estimation. The methodology developed in the paper is applied to Australian Household Expenditure Survey for 1984 to calculate item wise and overall economies of scale.

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  • Nanak Kakwani & Hyun H. Son, 2005. "Economies Of Scale In Household Consumption: With Application To Australia," Australian Economic Papers, Wiley Blackwell, vol. 44(2), pages 134-148, June.
    • Handle: RePEc:bla:ausecp:v:44:y:2005:i:2:p:134-148
    DOI: 10.1111/j.1467-8454.2005.00254.x
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    Cited by:

    1. Karbasi, A. & Mohammadzadeh, S.H., 2018. "Estimating Household Expenditure Economies of Scale in Iran," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277152, International Association of Agricultural Economists.
    2. Salem, Aliasghar & Fridzad, Ali & Amini, Mitra, 2020. "Estimating Electric Power's Equivalent Scale for the Urban Iranian Household," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 15(3), pages 295-312, July.
    3. Md. Matiur Rahman & Seung-Hoon Jeon & Kyoung-Soo Yoon, 2020. "Estimation of Equivalence Scale and Assessment of Its Impact on Poverty Measurement in Bangladesh," Sustainability, MDPI, vol. 12(21), pages 1-13, October.
    4. Son, Hyun H., 2012. "Evaluating social protection programs in Tajikistan," Journal of Asian Economics, Elsevier, vol. 23(2), pages 179-188.
    5. Thaiyoong Penny Mok & Gillis Maclean & Paul Dalziel, 2013. "Alternative Poverty Lines for Malaysia," Asian Economic Journal, East Asian Economic Association, vol. 27(1), pages 85-104, March.
    6. Jayasinghe, Maneka & Chai, Andreas & Ratnasiri, Shyama & Smith, Christine, 2017. "The power of the vegetable patch: How home-grown food helps large rural households achieve economies of scale & escape poverty," Food Policy, Elsevier, vol. 73(C), pages 62-74.
    7. Henderson, Heath & Follett, Lendie, 2022. "Targeting social safety net programs on human capabilities," World Development, Elsevier, vol. 151(C).

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