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A Re-examination of Private Consumption in Fiji

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  • Kumar, Saten

Abstract

Recently the Reserve Bank of Fiji (RBF) claimed that private consumption expenditure in Fiji has grown considerably in past years. For policy purposes, it is important to re-investigate the determinants of consumption in Fiji. This paper used alternative time series techniques to estimate real private consumption for Fiji using annual data from 1975-2005. It is found that the income and availability of consumer credit elasticities are significant and plausible. A stable real private consumption function is also attained using CUSUM and CUSUMSQ tests.

Suggested Citation

  • Kumar, Saten, 2009. "A Re-examination of Private Consumption in Fiji," MPRA Paper 18706, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:18706
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    References listed on IDEAS

    as
    1. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
    2. B Bhaskara Rao, 2005. "Testing Permanent Income Hypothesis for Fiji," Macroeconomics 0511013, University Library of Munich, Germany.
    3. Campbell, John Y & Mankiw, N Gregory, 1990. "Permanent Income, Current Income, and Consumption," Journal of Business & Economic Statistics, American Statistical Association, vol. 8(3), pages 265-279, July.
    4. Molana, H, 1991. "The Time Series Consumption Function: Error Correction, Random Walk and the Steady-State," Economic Journal, Royal Economic Society, vol. 101(406), pages 382-403, May.
    5. B. Bhaskara Rao, 2005. "Testing Hall's permanent income hypothesis for a developing country: the case of Fiji," Applied Economics Letters, Taylor & Francis Journals, vol. 12(4), pages 245-248.
    6. Davidson, James E H, et al, 1978. "Econometric Modelling of the Aggregate Time-Series Relationship between Consumers' Expenditure and Income in the United Kingdom," Economic Journal, Royal Economic Society, vol. 88(352), pages 661-692, December.
    7. Flavin, Marjorie A, 1981. "The Adjustment of Consumption to Changing Expectations about Future Income," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 974-1009, October.
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    Cited by:

    1. Rup Singh & Saten Kumar, 2010. "Some empirical evidence on the demand for money in the Pacific Island countries," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 27(3), pages 211-222, August.
    2. Kumar, Saten & Singh, Rup, 2009. "Some Empirical Evidence on the Demand for Money in the Pacific Island Countries," MPRA Paper 18703, University Library of Munich, Germany.
    3. Nikeel Nishkar Kumar & Arvind Patel & Navneel Shalendra Prasad & Shayal Nandani, 2023. "Loss aversion or hand-to-mouth behaviour in private consumption models," New Zealand Economic Papers, Taylor & Francis Journals, vol. 57(3), pages 247-259, September.
    4. Saten Kumar, 2011. "Cointegration and the demand for energy in Fiji," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 35(1), pages 85-97.
    5. Kumar, Saten, 2011. "Financial reforms and money demand: Evidence from 20 developing countries," Economic Systems, Elsevier, vol. 35(3), pages 323-334, September.

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    More about this item

    Keywords

    Real Private Consumption; Income Elasticity and Availability of Consumer Credit Elasticity.;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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