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Comparing international consumption patterns

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  • Kenneth Clements
  • Yanrui Wu
  • Jing Zhang

Abstract

When attempting to identify empirical regularities in consumption patterns, their tremendous diversity across countries represents both a major opportunity and challenge. For example, consumers in rich countries devote less than 20 percent of their budget to food, while this rises to more than 50 percent in the poorest countries. This paper uses a major new database released in Selvanathan and Selvanathan (2003) to explore several related issues, including the extent to which the consumption basket is diversified and how this changes with income, whether a simple utility-maximising model is capable of explaining the diversity of consumption patterns internationally, the measurement of the extent to which tastes differ across countries, and how the world can be partitioned into groups of countries with minimal within-group heterogeneity of tastes on the basis of the revealed preference of consumers.
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Suggested Citation

  • Kenneth Clements & Yanrui Wu & Jing Zhang, 2006. "Comparing international consumption patterns," Empirical Economics, Springer, vol. 31(1), pages 1-30, March.
  • Handle: RePEc:spr:empeco:v:31:y:2006:i:1:p:1-30
    DOI: 10.1007/s00181-005-0012-y
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    References listed on IDEAS

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    1. BARTEN, Anton P., 1977. "The systems of consumer demand functions approach: A review," LIDAM Reprints CORE 284, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Kenneth Clements & Yanrui Wu & Jing Zhang, 2006. "Comparing international consumption patterns," Empirical Economics, Springer, vol. 31(1), pages 1-30, March.
    3. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    4. Li Lian Ong, 2003. "The Big Mac Index," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-51241-2, December.
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    More about this item

    Keywords

    Cross-country comparisons; Consumption patterns; Income and price elasticities; D12; C20;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General

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