Changes In Consumption Expenditure Research Articles

Reprint of: How do households respond to income shocks?

We use panel data from the Italian Survey of Household Income and Wealth from 1991 to 2016 to document what components of the household budget constraint change in response to shocks to household labor income, both over shorter and over longer horizons. Consumption and wealth responses are informative about the household consumption (or savings) function and thus about what class of consumption-savings model best describes the data. Empirically, we first show that shocks to labor income are associated with negligible changes in transfers and non-labor income components, modest changes in consumption expenditures, and large changes in wealth. To understand the wealth response we then split households into a sample that does not own business or real estate wealth, and a sample that does. For the first group, we find that consumption responses are more substantial (and increasing with the horizon of the income shock) and wealth responses are much smaller (and mildly increasing with the income shock horizon). Turning to theory, we argue that for this group, a simple extension of the standard permanent income hypothesis (PIH) consumption function that allows for partial insurance against even permanent income shocks explains the consumption and wealth responses well, both at short and long horizons. For the second group with business wealth or real estate wealth the standard framework cannot explain the large changes in wealth associated with income shocks. We conclude that models which include shocks to the value of household wealth are necessary to fully evaluate the sources and consequences of household resource risk.

Perubahan Pengeluaran Konsumsi Masyarakat Kabupaten Barito Kuala Selama Masa Pandemi Covid-19 dengan Growth Incidence Curve

The COVID-19 pandemic that hit the world in early 2020 caused economic shock in Barito Kuala Regency. According to Statistics Indonesia of Barito Kuala Regency, the economy of Barito Kuala Regency in 2020 turned minus by 1.06 percent. This economic shock had an impact on consumption expenditure in all segments of households, including the poor. This study aims to determine changes in consumption expenditure in all percentiles of per capita expenditure in Indonesia. It used the Socio-Economic National Survey held by Statistics Indonesia. The Growth Incidence Curve (GIC) was employed, including in urban and rural areas, during and after the pandemic. In this research, the period of 2020-2021 was used to describe “during the pandemic”. The results indicated that, at this time, the consumption expenditure of the poor could be maintained with various social safety programs. Even for the urban areas, consumption expenditure increased across all percentiles. Meanwhile, 2021-2022 was used to describe “after the pandemic”. Interestingly, the consumption expenditure, during this period, was actually still under pressure. One of the possible reasons might be regarding the existence of social safety programs. When the pandemic began decreasing, the safety program was no longer provided massively like during the pandemic.

“Measuring Inflation under Pandemic Conditions”: A Comment

Abstract Diewert and Fox (2022) examine various implications of the 2020 COVID-19 pandemic for constructing consumer price indexes. The authors state that the pandemic caused major changes in consumption expenditures and shares which makes fixed basket index number formulae inapplicable. They emphasize the need for more frequent surveys of consumer expenditure which will enable compilation of the Fisher index which is considered superior to the traditional Laspeyres or Young indexes. In addition, Diewert and Fox discuss the use of various “new” technologies such as web scraping, scanner data, and information from transactions through credit cards to estimate consumption expenditure.

Changes in Consumption Expenditures among Baby-boomers and Young-olds: Latent Transition Analysis

The aim of this study was to examine the longitudinal transition of consumption expenditures among both baby-boomers and young-olds in South Korea. We used data from the 6th (2016) and the 7th (2018) waves of the Korean Longitudinal Study of Ageing (KLoSA). The final sample comprised 1,806 baby-boomers (age range=53-61 in 2016) and 1,483 young-olds (age range=65-74 in 2016). Consumption expenditures were observed with nine types of expenses: food, eating out, public education, private education, housing, health-care, clothing, cultural entertainment, and savings. According to the results from latent transition analysis (LTA), three consumption subgroups were identified among baby-boomers: “non-expenditure for education (NE, 69.7%)” group, “high-public education expenditures (PE, 10.7%)” group, and “high-public and private education expenditures (PPE, 19.6%)” group. For baby-boomers, NE and PE were more likely to remain the same type throughout the two waves, and PPE was most likely to move to NE two years later. Meanwhile, the consumption expenditures of young-olds were divided into “low-saving (LS, 63.7%)” group, “high-saving (HS, 40%)” group, and “education cost-centered (EC, 5.3%)” group. In the case of young-olds, the transition between the groups was unlikely to occur across the two waves which can be interpreted as having fewer life cycle changes than baby-boomers. This study suggests that it is necessary to take into account the difference between the generations when understanding longitudinal transition of consumption expenditures.

코로나19와 소비지출 변화: 신용카드 빅데이터 기반 스포츠서비스 및 용품 업종별 추이 분석

This study aims to identify the changes in consumer behavior caused by COVID-19 and derive implications by analyzing the changes in consumption expenditure before and after the spread of COVID-19 by major sports-related industries. The main analysis results are as follows. First, it was confirmed that the amount of consumption expenditure by sports-related industry in 2020, when the spread of COVID-19 began, recorded a significant decrease compared to 2019. In particular, during the COVID-19 pandemic (1st and 2nd), the scale of decrease in consumption expenditure was remarkably large. Second, differences in consumption expenditure trends were verified according to the characteristics of sports-related industries (high-intensity distancing industries, indoor and outdoor, etc.). Third, it was confirmed that there is a difference in the rate of recovery of consumption expenditure immediately after the COVID-19 pandemic and increase in consumption expenditure according to the characteristics of factors such as consumer gender, age group, and income quintile.

Is land certification pro-poor? Evidence from Ethiopia

The establishment of secure and easily transferable land rights are a key component of rural development and poverty reduction strategies in many developing countries. In this paper, we use data on the Ethiopian land certification program to examine the impact of land certification on consumption expenditures of poor rural households in Ethiopia. We find that land certification significantly improves the welfare of poor rural households, as measured through changes in consumption expenditure, and that the magnitude of these effects increases with the duration of land certificate ownership. We further show that rental market participation increased after certification and is one of the primary channels through which land certification affects consumption expenditure outcomes.

The Composition Effect of Consumption around Retirement: Evidence from Singapore

It is well established that consumption is “hump” shaped over an individual's lifecycle, peaking in middle age and then declining in the years that follow. Prior research has documented that consumption declines at retirement, which is inconsistent with the standard lifecycle model with consumption smoothing. Using a unique dataset with detailed administrative records of credit and debit card transactions, we show the hump shaped lifecycle consumption pattern as documented in the literature. Additionally, we show compositional changes in consumption expenditures across individuals in the years surrounding retirement confirming the results of Aguiar and Hurst (2005, 2013).

Struktura spotřeby českých domácností 1970-2012

The paper describes the development of household consumption expenditures from a longer perspective. Currently, there are available data for more than forty years and it means that lots of information about changes in structure and main tendencies can be studied. Since the emphasis is put on the comparable time series, it was necessary to prepare transformation of original data into national accounts. Historical figures on private consumption were published in line with the Material Product System that is not fully comparable with the System of National Accounts. Data on private consumption reflecting only material part of consumption had to be transformed into household consumption expenditures covering both expenditures for material and non-material products. The process of transformation of original data reflecting socialist statistical system is briefly described, as well as main differences. Key points of transformation are illustrated on selected years. Finally, original data are compared with reconstructed ones and differences are explained. The analysis provides useful information about main changes in consumption expenditures by CZ-COICOP. Finally, some often discussed issues like the relative increase of expenditures connected with housing, decrease of the share of foodstuff etc. can be proven now.

The Composition Effect of Consumption around Retirement: Evidence from Singapore

It is well established that consumption is “hump” shaped over an individual’s lifecycle, peaking in middle age and then declining in the years that follow. Prior research has documented that consumption declines at retirement, which is inconsistent with the standard lifecycle model with consumption smoothing. Using a unique dataset with detailed administrative records of credit and debit card transactions, we show the hump shaped lifecycle consumption pattern as documented in the literature. Additionally, we show compositional changes in consumption expenditures across individuals in the years surrounding retirement confirming the results of Aguiar and Hurst (2005, 2013).

Vývoj a změny spotřebních výdajů obyvatelstva

The paper deals with development and changes in consumption expenditures of population. It uses secondary data to analyze consumption expenditures of EU-25 and the Czech Republic and concetrates on changes in the expenditure groups over the period of past years. Other part of this paper is devoted to primary data analysis. Primary data were obtained in a questionnaire survey. Primary data analysis is based on statistical methods and it investigates changes in the structure of consumption expenditures of households in relation to changes in household income. By using dependency analysis the paper verifies dependency of surveyed groups of consumption expenditures and groups of households sorted by identification characteristics. Additionally, also based on the primary research, the paper tries to find out the way households allocate money surplus remaining after covering all the adequate expenses.

An Exploration of the Changes in Consumption Expenditure of the Retired Households in South Korea

This study analyzed the changes in household consumption expenditure of retired households using Korean panel data. We compared the pre and post retirement-consumption levels in different consumption categories using panel data. Paired t-test showed that changes in the consumption patterns before and after retirement were not significant except for the households in the third net worth quartile. Analyzing the effect of retirement on the level of household consumption expenditure, this study found that the effect of retirement was not significant in overall, although retirement had a negative effect on the level of consumption expenditure among households in the lowest net worth distribution. Understanding changes in consumption patterns of retiring households provides important information to design social security policies.

POVERTY DYNAMICS DURING TRADE REFORM: EVIDENCE FROM RURAL VIETNAM

This paper implements and adapts the conceptual framework developed by Winters (2002) that identifies the transmission mechanisms between trade policy reform and household welfare outcomes. We make use of household panel data from Vietnam collected in two years, 1992–93 and 1997–98 that span the very earliest years of the reform period and its immediate after effects. Poverty dynamics are modeled using changes in consumption expenditure and poverty transition models. The trade effect is captured by a set of variables that are most likely to have an impact on rural poverty, namely prices of staples and employment in the export sector. We show that trade liberalization has a material and positive effect on rural household welfare and this trade effect is largely transmitted to the poor through the labor market channel.

Capital mobility and the current account

This paper analyzes the effect of unanticipated changes in the terms of trade on consumption expenditures and the current account in a small open economy. Simple formulas are obtained for the covariances of changes in consumption expenditures, the current account and the expected current account with changes in the terms of trade. It is shown that, if investment is uncorrelated with the terms of trade, a necessary condition for unanticipated changes in the terms of trade to be correlated with changes in consumption expenditures and the expected current account is that the real expected return on foreign bonds differs from the real expected return on domestic bonds.

THE IMPACT OF POLLUTION CONTROL ON CONSUMER INCOME A METHODOLOGICAL STUDY

ABSTRACTThis paper develops a methodology for assessing the impact of a comprehensive pollution control program on income distribution. A regional input‐output table is employed to determine the overall effect of pollution control costs on prices. These price changes, are then translated into changes in consumption expenditures by income groups, which serve as a measure of the impact on consumers.The validity of this methodology is tested on the metropolitan Philadelphia region. It was found that the EPA air quality standards would raise the spending of middle income groups by about 3 percent as compared to about 2 percent increase for the highest and the lowest income groups.The paper concludes with an examination of the advantages and limitations of the proposed methodology.

Consumers' Behaviour and the Conditions for Exchange Stability

The proposition that the exchange rate will be stable if the sum of the elasticities of import demand of the home and foreign ( rest of the world ) country respectively exceeds unity, rests on the following assumptions: (a) that each country's elasticity of aggregate supply is infinite and that its output contains no import component, so that imports consist of final goods only; (b) that trade is initially balanced; (c) that, for any given national money income, aggregate money expenditure remains constant irrespective of price changes. Other assumptions, which are usually taken for granted, are those of a constant budget surplus, constant money wages, a neutral influence of income redistribution on the parameters of the consumption function, and a perfectly elastic supply of money (bonds), making for a credit system which performs no independent restrictive function. One can drop one or more of these restrictive assumptions and examine the consequences. In recent years the fashion has been either to drop the whole lot-in the process, however, throwing overboard, into a vast sea of coefficients, the baby as well as the bathwater-or, when the dropping was selective, to jettison assumption (c) while retaining all the others. This paper falls exclusively in the latter category, and encompasses, therefore, within its purview only four writings out of the vast literature on exchange stability: those of A. C. Harberger,' S. Laursen and L. A. Metzler,2 W. F. Stolper3, and A. C. L. Day.4 Except for one or two passing references to the variation of investment outlays, all these writings allow only for changes in consumption expenditure. The dropping of assumption (c) affects, therefore, the consumption component of aggregate expenditure, but not the investment component. In fact, to ensure rigorous consistency, it is necessary to assume not only that investment outlays are constant, but also that they are confined to domestic goods, whose prices [by assumption (a)] do not change, so that the volume of investment is constant too. The plan of this paper is to set out the relationship between the various conditions for exchange stability formulated by the above

Changes in Consumption Expenditures and the Defense Program

Changes in Consumption Expenditures and the Defense Program