Household Consumption Behavior Research Articles

Consumption and Remittances in Migrant Households: Toward a Productive Use of Remittances

This article reviews the magnitude of remittance flows into Mexican households and examines the consumption patterns of remittance‐receiving households. A thorough understanding of the dynamics of remittances and consumption in migrant households in Mexico should inform policy makers of the best ways to channel these resources into productive uses. The Mexican Income and Expenditure Survey for 1989 is used to compare and test patterns of consumption and uses of remittances in urban and rural Mexico. (JEL F2–F22, O1–O15)

Evaluating consumer sentiments as predictors of UK household consumption behavior: Are they accurate and useful?

This paper investigates empirically whether consumer sentiments indices, based on surveys complied by GfK, forecast household consumption types for the UK. Firstly, we use a quantitative equation approach to assess whether the indices are able to forecast household consumption growth in addition to traditional variables, which are included as control variables. Subsequently, using qualitative directional analysis, we investigate whether the indices are accurate and useful predictors as well. We find that, broadly speaking, both the headline, or aggregate, and the major purchasing indices have some predictive powers in addition to the control variables and are also directionally accurate and useful.

A Simple Multi-Regional Input–Output Account for Waste Analysis

The present paper provides a simple multiregional input–output model for waste analysis with which to estimate intraregional and interregional effects of industrial wastes embodied in regional final consumptions. The empirical analyses using 1995 nine-regions input–output tables reveals the regional properties of the interregional linkage effects. The Kanto and Kinki regions remarkably control the industrial waste emissions and waste landfills within their own regions by importing waste-intensive intermediate goods and services from the other regions. The Chugoku and Shikoku regions greatly contributed to the production of the waste-intensive goods and services for the other regions, considering the waste emissions and waste landfills relative to the commodity production levels. We also find that the household consumption behaviour in other regions indirectly plays a more important role in waste emissions than the municipal waste disposal behaviour in the region in question at least in 1995.

A Simple Multi-Regional Input–Output Account for Waste Analysis

The present paper provides a simple multiregional input–output model for wasteanalysis with which to estimate intraregional and interregional effects of industrialwastes embodied in regional final consumptions. The empirical analyses using 1995nine-regions input–output tables reveals the regional properties of the interregionallinkage effects. The Kanto and Kinki regions remarkably control the industrial wasteemissions and waste landfills within their own regions by importing waste-intensiveintermediate goods and services from the other regions. The Chugoku and Shikokuregions greatly contributed to the production of the waste-intensive goods andservices for the other regions, considering the waste emissions and waste landfillsrelative to the commodity production levels. We also find that the householdconsumption behaviour in other regions indirectly plays a more important role inwaste emissions than the municipal waste disposal behaviour in the region in questionat least in 1995.

How much do electricity tariff increases in Ukraine hurt the poor?

Increasing the electricity tariffs for private consumers to cost-covering levels has been a very sensitive issue for all transition countries. The likely negative social consequences are the central argument why the necessary tariff corrections have not yet been implemented in Ukraine by the political decision makers. Since official data is not available, there is insufficient knowledge regarding the electricity consumption behaviour of private households. This makes it difficult to counter the official arguments with hard evidence. A survey was carried out by the authors giving a more detailed picture. Basic data of the survey was used in evaluating the impact of possible tariff increases on the household expenditures of different income groups, using both the compensating (CV) and the equivalent variation (EV) methods. The findings confirm that an electricity tariff increase up to the level which would cover “officially” measured costs, as defined by the Ukrainian electricity regulatory authority, would not cause severe social problems. However, further increases up to a level, which would cover the “true” costs, i.e. up to a level comparable to the average OECD level, should only be realised in steps.

Job Loss Expectations, Realizations, and Household Consumption Behavior

Although the theoretical importance of expectations in decision-making is well known to economists, only a few empirical papers investigate the impact of individual subjective expectations on economic outcomes. This paper examines the link between expectations of future job losses and the subsequent impact that these expectations have on household consumption behavior. The first part of the paper documents the empirical relationship between job loss expectations and subsequent job losses. Subjective job loss expectations have significant predictive power in explaining future job losses even when standard demographic information known to be associated with the prevalence of job displacement is included in the analysis. Furthermore, higher subjective job loss probabilities are correlated with an increased expectation of future earnings declines. Overall, these results indicate that the variable for subjective job loss expectations is a meaningful predictor of subsequent displacement. Since a job displacemen...

Environmental defensive expenditures and households behaviour in Italy

The paper explores the role of Environmental Defensive Expenditures in the consumption behaviour of Italian households. Environmental Defensive Expenditures are not borne to increase households' welfare, but to prevent or avoid the effects of a worsening environmental quality. The literature on environmental accounting argues that economic growth in industrialized countries is accompanied by an increasing load of defensive activities that may lead to a reorientation of consumption behaviour. In this work this hypothesis is tested using annual data on mean consumption expenditures of Italian households from 1985 to 1996. A complete system of demand is estimated and short-run price elasticities of demand for Defensive Expenditures are calculated. The complete system of demand functions is specified using the Quadratic Almost Ideal Demand System proposed by Banks, Blundell and Lewbel. Results show that there is very low substitution between the demand for the six aggregate goods in which total expenditure is here divided and the Environmental Defensive Expenditures. Thus it seems that an increase in Environmental Defensive Expenditures, driven by a change in environmental quality, would not lead to a change in the consumption pattern, at least as far as Italian households are concerned.

Do consumption expenditures depend on the household’s relative position in the income distribution?

AbstractEven though the permanent income and relative income hypotheses have been introduced in past research to explain consumer behaviour, no previous attempt was undertaken to integrate them in one model. In this article, the hypotheses were synthesized into a single model. The model was empirically tested using data from the 1996 Canadian Family Expenditure Survey. The results indicate that household consumption behaviour is generally explained by both hypotheses when integrated into one model, contrary to previously treating them as mutually exclusive hypotheses.

Are Peasants Risk‐Averse Decision Makers?

Les AA. se proposent d'evaluer l'approche qui explique le conservatisme culturel de la petite agriculture de subsistance par la rationalite d'une analyse cout-benefice effectuee par les paysans, ou les individus prennent des decisions en fonction d'un comportement d'aversion au risque en raison de leur situation economique incertaine et precaire. A cet effet, ils combinent des recherches de terrain comparatives experimentales avec des recherches ethnographique economiques dans deux groupes de petites exploitations agricoles, les Mapuche du Chili et les Sangu de Tanzanie. Ces experimentations, malgre des lacunes methodologiques, mettent en doute les approches theoriques standards. Concues afin de mesurer les preferences pour le risque directement, elles montrent que les Mapuche et les Sangu expriment une preference pour le risque dans leurs prises de decisions - suggerant que de facon generale les agriculteurs de subsistance n'agissent pas en fonction d'une aversion envers le risque. D'autre part, la preference pour le risque semble s'expliquer essentiellement en fonction du groupe culturel. En conclusion, les AA. esquissent brievement une alternative theorique au modele standard.

Household energy consumption in Switzerland

Households consume more energy embodied in goods and services than they consume with energy carriers. Thus, energy assessments need to address both direct consumption and indirect consumption via commodities. This paper first presents a conceptual framework for describing and analysing the direct and indirect energy use of households. The framework is based on material flux analysis and differentiates between four household activities feeding, housing, transporting and consuming. Secondly, Swiss data on household energy consumption are presented and discussed in the context of household size, technology and consumption behaviour. It is shown that these factors considerably shape per capita energy demand. The third part presents energy projections based on trend assumptions for demographic and technological developments for the next 30 years. When zero growth per capita in commodities consumption is assumed, overall energy demand will increase by about 5%, mainly due to strong increases in gasoline demand. When the growth rate of commodities consumption exceeds 0.3% per year, embodied energy demand will offset efficiency gains achieved by technological improvements in the economic and domestic sectors and will fuel overall energy growth.

The Effect of Self-Sufficiency on Fruit and Vegetable Consumption of China's Rural Households

Multivariate analysis of variance and econometric analysis are used in conjunction to analyze China's rural household consumption behavior across households that differ in the level of self-sufficiency relative to the production/purchase of fruits and vegetables. There is a significant difference in consumption patterns for different households with different levels of self-sufficiency. Households that purchase but do not produce fruits and vegetables exhibit a notably more market-oriented price responsive behavior. The consumption decisions of households that produce fruits and vegetables, but do not purchase them, are influenced more heavily by implicit income effects than by implicit price effects.

Changes in consumption of households during 1990-1997

The article provides social statistics concerning the main changes in the consumption behaviour of Czech households between 1990 and 1997. The descrip- tion is based on a comparison with the situation and trends in countries of the Euro- pean Union. The author uses the Family Budget Surveys data files that were weighted to assure higher representativeness of the research results. Different statis- tical procedures are employed to describe main shifts in the composition of house- hold budgets on the whole and for different consumption items in the first stage, and according to different factors characterising the household in the second stage. In the last part of the article, multiple regression and ANOVA analysis were applied to an- swer the question of the changes in the influence of different social indicators of households on the relative household expenditures. The author cannot confirm the hypothesis that 'meritocratic' factors (income, education) have strengthened and 'demographic' factors (family size, age or residence size) have weakened in influ- ence for explaining the variability of four basic relative consumer items. The changes in consumption behaviour have a transitional character rather than the char- acter of long-term historical changes apparent in the countries of the European Un- ion.

Intrahousehold Allocations: a Review of Theories and Empirical Evidence

In this paper, we provide a survey of recent developments in the theoretical and empirical modelling of intrahousehold allocations. We focus on how the recent theory extends earlier models of household consumption and production behaviour, and in our discussion of empirical applications we focus on how the basic assumption behind the traditional household models, income pooling, is tested. We also briefly discuss recent extensions to income pooling tests. In the discussion of empirical work we try to lay out some of the difficult empirical problems related to endogeneity of covariates. In all of the empirical discussion, we focus on applications to human resources in low income countries.

The cost of children: May the collective approach to household behavior help?

The collective approach to household consumption behavior tries to infer from variables supposed to affect the general bargaining position of household members information on the allocation of consumptions goods and tasks among them. This paper investigates the extension of previous work to the case where children may be considered as a public consumption good by the two adult members of a household. The main question being asked is whether it is possible to retrieve from the aggregate consumption behaviour of the household and the relative earnings of the parents information on the allocation of goods between them and children. This alternative approach to the estimation of the ‘cost of children’ is contrasted with the conventional approach based on a ‘unitary’ representation of and demographic separability assumptions on household consumption behaviour.

ANALYSIS OF RURAL HOUSEHOLD CONSUMPTION EXPENDITURE IN SOUTH AFRICA: THE CASE OF FOOD PLOT HOLDERS IN TYEFU IRRIGATION SCHEME IN THE EASTERN CAPE PROVINCE / ANALISE VAN VERBRUIKSBESTEDING VAN LANDELIKE HUISHOUDINGS IN SUID-AFRIKA: 'N GEVALLESTUDIE VAN KLEINBOERE IN TYEFU BESPROEIINGSKEMA IN DIE OOSKAAP PROVINSIE

Policy formulation in relation to rural development requires research on rural household consumption behaviour and patterns. In this paper research implications of consumption function theory in relation to rural household expenditures are briefly outlined and results of a cross-section analysis of seven expenditure categories of food plot holders at Tyefu Irrigation Scheme are reported. Consumption function parameters are estimated by ordinary least square method of regression of farm account data. The analysis reveals that the sampled food plot holders have a marginal propensity to consume of (0.349) as well as average propensity to consume of (0.652). Family characteristics (used as explanatory variables) such as age distribution and family size vary in their ability to explain expenditure patterns depending upon types of commodity. Further research will help to rigorously assess the impact of additional forces such as education, location, farm assets, etc. upon the standard of living of farm people.

Household Consumption Equivalence Scales: Some Estimates from New Zealand Household Expenditure and Income Survey Data

This paper uses data on expenditures and incomes of New Zealand households of different demographic profiles to construct equivalence scales. The scales are useful in estimating the relative levels of spending required by the households to attain a given level of utility. Preference consistent ‘complete demand systems’ are analyzed to test for the demographic effects on the consumption patterns of households. Equivalence scales for respect to specific items of consumption as well as total consumption are worked out from the observed consumption behaviour of households. The results are largely in line with those found in existing similar studies both in Australia and New Zealand. To the best of our knowledge, this is the first attempt at constructing equivalence scales with New Zealand household budget data in the framework of hypothesized utility maximizing behaviour of households.

Demographic variables in demand systems: An analysis of New Zealand household expenditure 1984–1992

Econometric analysis of household expenditure is an important area of economic inquiry because the estimated demand parameters are particularly useful in many behavioural aspects of demand forecasting and in welfare issues. This paper analyses expenditure patterns in Mew Zealand by estimating, on household budget data, complete demand systems with the following underlying cost function: which has been demographically extended to isolate household composition effects on consumption. This allows comparisons of the consumption behaviour of households and the welfare implications of the demographic parameters. In this paper, several demographically extended demand functions have been estimated and their behavioural and welfare implications compared Price, total expenditure and household size elasticities, computed from the “best” demand functions, are within expectations, and they offer some insights into consumer behaviour

Household characteristics and consumption behaviour: A nonparametric approach

In this paper we apply nonparametric methods in order to discuss some empirical aspects of household consumption behaviour. First, we study the differences in the consumption behaviour between household types. We find that, except for food, there are no clear significant differences. Secondly, we derive the functional form for the food Engel curve, using specification tests consistent in the direction of nonparametric alternatives. Finally, we use this specification to discuss the misleading conclusions that could be reached from a mechanic interpretation of the rejection of Hausman's test, when applied to test the exogeneity of expenditure. The data is obtained from the Spanish Expenditure Survey 1980–81 and 1990–91.

Consumption Behavior of Japanese Agricultural Households: Analysis of an Almost Ideal Demand System

Consumption Behavior of Japanese Agricultural Households: Analysis of an Almost Ideal Demand System

Financial Deregulation and Household Saving

The last decade has seen widespread domestic financial deregulation in the industrial world, particularly in the United States, United Kingdom and the Nordic countries, resulting in an increase in competition both between banks and saving institutions (thrifts or building societies) as they moved into each others services, and within each-sector.' This opened up new financial options, particularly for households, the sector that was probably most affected by government regulation. For example, there was a significant increase in equity withdrawals from personal housing wealth in both the United Kingdom and United States over the ig8os.2 This period also saw a significant change in household consumption behaviour, the most dramatic illustration being the fall in the household saving ratio in those countries where the process of deregulation has gone furthest. This paper reports the results from estimating a model of household saving using regional data for the United Kingdom, with a particular emphasis on the interaction between household saving and financial deregulation. The estimates are used to calculate the relative importance of different factors in the fall in personal saving over the I98os. I conclude that deregulation lowered the equilibrium level of saving over the I98os, probably 2' percentage points per annum, as well as making saving significantly more dependent on changes in wealth, income and real interest rates. There have been a number of earlier empirical studies looking at the interaction between financial deregulation and household behaviour. Manchester and Poterba (i 989), Miles (I 992) and Koskela et al. (I 992) present empirical evidence on the interaction between deregulation, the housing market, and saving in the United States, United Kingdom and Finland, respectively. Others have estimated saving functions which include variables representing the effects of financial deregulation or have considered the impact of financial deregulation on liquidity constraints in consumption.3 The