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Expenditure Patterns and Aggregate Consumer Behaviour: Some Experiments with Australian and New Zealand Data

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  • SRIKANTA CHATTERJEE
  • CLAUDIO MICHELINI
  • RANJAN RAY

Abstract

This paper analyzes expenditure patterns in Australia and New Zealand by estimating ‘complete’ demand systems on budget data. Tests of linear Engel curves and separable preferences are carried out on both data sets. The study also exploits the information on household composition to test for demographic effects. Several new demographic ally extended demand functional forms are proposed and estimated, and their behavioural and welfare implications in terms of equivalence scales compared. The study yields plausible estimates of price and expenditure elasticities, and shows that relevant price information can be used successfully to estimate the ‘cost’ of a child.

Suggested Citation

  • Srikanta Chatterjee & Claudio Michelini & Ranjan Ray, 1994. "Expenditure Patterns and Aggregate Consumer Behaviour: Some Experiments with Australian and New Zealand Data," The Economic Record, The Economic Society of Australia, vol. 70(210), pages 278-291, September.
    • Handle: RePEc:bla:ecorec:v:70:y:1994:i:210:p:278-291
    DOI: 10.1111/j.1475-4932.1994.tb01848.x
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    References listed on IDEAS

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    1. David E. A. Giles & Peter Hampton, 1985. "An Engel Curve Analysis of Household Expenditure in New Zealand," The Economic Record, The Economic Society of Australia, vol. 61(1), pages 450-462, March.
    2. BARTEN, Anton P., 1969. "Maximum likelihood estimation of a complete system of demand equations," LIDAM Reprints CORE 34, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    6. Muellbauer, John, 1976. "Community Preferences and the Representative Consumer," Econometrica, Econometric Society, vol. 44(5), pages 979-999, September.
    7. repec:bla:ecorec:v:61:y:1985:i:172:p:450-62 is not listed on IDEAS
    8. Browning, Martin, 1992. "Children and Household Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1434-1475, September.
    9. Nelson, Julie A, 1988. "Household Economies of Scale in Consumption: Theory and Evidence," Econometrica, Econometric Society, vol. 56(6), pages 1301-1314, November.
    10. Jorgenson, Dale W & Slesnick, Daniel T, 1987. "Aggregate Consumer Behavior and Household Equivalence Scales," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(2), pages 219-232, April.
    11. Ray, Ranjan, 1983. "Measuring the costs of children : An alternative approach," Journal of Public Economics, Elsevier, vol. 22(1), pages 89-102, October.
    12. Muellbauer, John, 1977. "Testing the Barten Model of Household Composition Effects and the Cost of Children," Economic Journal, Royal Economic Society, vol. 87(347), pages 460-487, September.
    13. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    14. Arthur Lewbel, 1985. "A Unified Approach to Incorporating Demographic or Other Effects into Demand Systems," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 52(1), pages 1-18.
    15. Ray, Ranjan, 1980. "Analysis of a Time Series of Household Expenditure Surveys for India," The Review of Economics and Statistics, MIT Press, vol. 62(4), pages 595-602, November.
    16. Lewbel, Arthur, 1989. "Household equivalence scales and welfare comparisons," Journal of Public Economics, Elsevier, vol. 39(3), pages 377-391, August.
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    Cited by:

    1. Griffiths, W.E. & Valenzuela, R., 2001. "Estimating Costs of Children from Micro-Unit Records: A New Procedure Applied to Australian Data," Department of Economics - Working Papers Series 795, The University of Melbourne.
    2. Michelini, Claudio, 1999. "The estimation of a rank 3 demand system with demographic demand shifters from quasi-unit record data of household consumption," Economics Letters, Elsevier, vol. 65(1), pages 17-24, October.
    3. Xin Gu & Zhang-Yue Zhou & Yan-Rui Wu, 2019. "Understanding China’S Urban Consumption Patterns: New Estimates And Implications," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(04), pages 961-981, September.
    4. J. V. Meenakshi & Ranjan Ray, 1999. "Regional differences in India's food expenditure pattern: a complete demand systems approach," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(1), pages 47-74.
    5. Geoffrey Lancaster & Ranjan Ray, 1998. "Comparison of Alternative Models of Household Equivalence Scales: The Australian Evidence on Unit Record Data," The Economic Record, The Economic Society of Australia, vol. 74(224), pages 1-14, March.

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