Changes in the distribution of household consumption in Southeast Asia

Abstract

This paper uses household survey data from five Southeast Asian countries (Cambodia, Indonesia, the Philippines, Thailand and Vietnam) to examine changes in the distribution of per capita consumption over the period 2006–2014. We perform a decomposition analysis to study the factors that contribute to changes in per capita consumption at the mean and along the entire distribution. Our findings indicate that changes in per capita consumption over time are mainly driven by changes in household income, especially at the top of the distribution. We also find that a sizeable part of the changes in per capita consumption may be attributed to changes in the household size and educational attainment. Urbanization typically contributes to an increase in per capita consumption with exception of the Philippines, where urbanization has declined over time. The contribution of changes in demographic characteristics to changes in per capita consumption is generally positive but relatively small. Our findings highlight the importance of policies that aim to alleviate poverty by enhancing educational attainment and reducing fertility. These policies are particularly relevant in Cambodia, Indonesia and the Philippines, where national fertility rates remain high.