Changes in New Zealand Consumer Living Standards during the Period of Deregulation 1984–1996

Abstract

This paper focuses on changes in New Zealanders’ consumption behaviour during the period of deregulation in the 1980s and 1990s. After estimating the Almost Ideal Demand System, changes in living standards among 10 income classes are analysed based on the dual approach of consumer behaviour. When the observed total expenditure is higher than the estimated minimum cost, this indicates that the standard of living for the income class has improved, and vice versa. My findings suggest that the effect of deregulation varies among income classes and that while the higher income classes benefit most, they do not consistently nor exclusively benefit from deregulation.