IDEAS home Printed from https://ideas.repec.org/p/ags/iaae18/277152.html
   My bibliography  Save this paper

Estimating Household Expenditure Economies of Scale in Iran

Author

Listed:
  • Karbasi, A.
  • Mohammadzadeh, S.H.

Abstract

Households differ from each other concerning size, age, gender and other properties, and it is expected that households with different properties have different consumption patterns. In this study, economies of scale of Iranian households (Mashhad City) were estimated using Engel approach of food consumption and Barten approach for 8 different commodity groups. In Engel approach, economies of scale was equal for all the commodities, so the estimated economies of scale indicator was over estimated. In Berten approach, the indicator estimated more accurately, and it was different for commodity groups. The results showed that food, housing, clothing, transportation and communication have economies of scale. The smallest and the largest of economies of scale were related to food as a private and housing as a public commodities, respectively. Economies of scale for exclusive commodities and miscellaneous commodities were greater than one, and there was diseconomies of scale. Overall economies of scale indicator was equal to 0.79; it showed that 21% of absolute expenditure in larger households could be reduced without changing their standard of living. Acknowledgement : Thank you

Suggested Citation

  • Karbasi, A. & Mohammadzadeh, S.H., 2018. "Estimating Household Expenditure Economies of Scale in Iran," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277152, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae18:277152
    DOI: 10.22004/ag.econ.277152
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/277152/files/1130.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.277152?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Martin Browning & Pierre-André Chiappori & Arthur Lewbel, 2013. "Estimating Consumption Economies of Scale, Adult Equivalence Scales, and Household Bargaining Power," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(4), pages 1267-1303.
    2. Trevon D. Logan, 2011. "Economies Of Scale In The Household: Puzzles And Patterns From The American Past," Economic Inquiry, Western Economic Association International, vol. 49(4), pages 1008-1028, October.
    3. John Gibson, 2002. "Why Does the Engel Method Work? Food Demand, Economies of Size and Household Survey Methods," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(4), pages 341-359, September.
    4. Angus Deaton & Christina Paxson, 1998. "Economies of Scale, Household Size, and the Demand for Food," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 897-930, October.
    5. Li Gan & Victoria Vernon, 2003. "Testing the Barten Model of Economies of Scale in Household Consumption: Toward Resolving a Paradox of Deaton and Paxson," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1361-1377, December.
    6. Nanak Kakwani & Hyun H. Son, 2005. "Economies Of Scale In Household Consumption: With Application To Australia," Australian Economic Papers, Wiley Blackwell, vol. 44(2), pages 134-148, June.
    7. Benus, J & Kmenta, J & Shapiro, Harold T, 1976. "The Dynamics of Household Budget Allocation to Food Expenditures," The Review of Economics and Statistics, MIT Press, vol. 58(2), pages 129-138, May.
    8. Victoria Vernon, 2004. "Food Expenditure, Food Preparation Time and Household Economies of Scale," Labor and Demography 0412005, University Library of Munich, Germany.
    9. Lazear, Edward P & Michael, Robert T, 1980. "Family Size and the Distribution of Real Per Capita Income," American Economic Review, American Economic Association, vol. 70(1), pages 91-107, March.
    10. Thaiyoong Penny Mok & Gillis Maclean & Paul Dalziel, 2011. "Household Size Economies: Malaysian Evidence," Economic Analysis and Policy, Elsevier, vol. 41(2), pages 203-223, September.
    11. Nelson, Julie A, 1988. "Household Economies of Scale in Consumption: Theory and Evidence," Econometrica, Econometric Society, vol. 56(6), pages 1301-1314, November.
    12. Gibson, John, 2002. "Why Does the Engel Method Work? Food Demand, Economies of Size and Household Survey Methods," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(4), pages 341-359, September.
    13. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Md. Matiur Rahman & Seung-Hoon Jeon & Kyoung-Soo Yoon, 2020. "Estimation of Equivalence Scale and Assessment of Its Impact on Poverty Measurement in Bangladesh," Sustainability, MDPI, vol. 12(21), pages 1-13, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jayasinghe, Maneka & Chai, Andreas & Ratnasiri, Shyama & Smith, Christine, 2017. "The power of the vegetable patch: How home-grown food helps large rural households achieve economies of scale & escape poverty," Food Policy, Elsevier, vol. 73(C), pages 62-74.
    2. Trevon D. Logan, 2011. "Economies Of Scale In The Household: Puzzles And Patterns From The American Past," Economic Inquiry, Western Economic Association International, vol. 49(4), pages 1008-1028, October.
    3. Md. Matiur Rahman & Seung-Hoon Jeon & Kyoung-Soo Yoon, 2020. "Estimation of Equivalence Scale and Assessment of Its Impact on Poverty Measurement in Bangladesh," Sustainability, MDPI, vol. 12(21), pages 1-13, October.
    4. Perali, Federico, 2008. "The second Engel law: Is it a paradox?," European Economic Review, Elsevier, vol. 52(8), pages 1353-1377, November.
    5. Thaiyoong Penny Mok & Gillis Maclean & Paul Dalziel, 2013. "Alternative Poverty Lines for Malaysia," Asian Economic Journal, East Asian Economic Association, vol. 27(1), pages 85-104, March.
    6. Gutierrez, Federico H., 2018. "A Sharing Model of the Household: Explaining the Deaton-Paxson Paradox and Computing Household Indifference Scales," GLO Discussion Paper Series 166, Global Labor Organization (GLO).
    7. Echeverría, Lucía & Molina, José Alberto, 2022. "Exploring household heterogeneities of the Deaton-Paxson puzzle: Evidence for Argentina," Nülan. Deposited Documents 3622, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    8. Olivier Bargain & Olivier Donni & Prudence Kwenda, 2011. "Intrahousehold Distribution and Child Poverty: Theory and Evidence from Côte d'Ivoire," Working Papers 2011-031, Human Capital and Economic Opportunity Working Group.
    9. Donald Vitaliano, 2015. "A note on the ‘food paradox’: some contradictory evidence," Review of Economics of the Household, Springer, vol. 13(4), pages 1043-1053, December.
    10. Devajyoti Deka, 2014. "The Living, Moving and Travel Behaviour of the Growing American Solo: Implications for Cities," Urban Studies, Urban Studies Journal Limited, vol. 51(4), pages 634-654, March.
    11. Timothy J. Halliday, 2010. "Mismeasured Household Size and its Implications for the Identification of Economies of Scale," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(2), pages 246-262, April.
    12. Bargain, Olivier & Donni, Olivier & Magejo, Prudence, 2011. "Intrahousehold Distribution and Child Poverty: Theory and Evidence from Côte d’Ivoire," IZA Discussion Papers 6029, Institute of Labor Economics (IZA).
    13. Trevon D. Logan, 2008. "Are Engel Curve Estimates of CPI Bias Biased?," NBER Working Papers 13870, National Bureau of Economic Research, Inc.
    14. Sanae Tashiro, 2009. "Differences in Food Preparation by Race and Ethnicity: Evidence from the American Time Use Survey," The Review of Black Political Economy, Springer;National Economic Association, vol. 36(3), pages 161-180, December.
    15. Berendeeva, Ekaterina & Ratnikova, Tatiana, 2016. "The Deaton–Paxson paradox in the consumption of Russian households," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 42, pages 54-74.
    16. Bargain, Olivier & Donni, Olivier & Kwenda, Prudence, 2014. "Intrahousehold distribution and poverty: Evidence from Côte d'Ivoire," Journal of Development Economics, Elsevier, vol. 107(C), pages 262-276.
    17. Gibson, John, 2003. "Does Measurement Error Explain a Paradox About Household Size and Food Demand? Evidence from Variation in Household Survey Methods," 2003 Annual meeting, July 27-30, Montreal, Canada 22198, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Schneider, Kate R., 2022. "Nationally representative estimates of the cost of adequate diets, nutrient level drivers, and policy options for households in rural Malawi," Food Policy, Elsevier, vol. 113(C).
    19. Nancy Folbre & Marta Murray-Close & Jooyeoun Suh, 2018. "Equivalence scales for extended income in the U.S," Review of Economics of the Household, Springer, vol. 16(2), pages 189-227, June.
    20. Shari Eli & Nicholas Li, 2015. "Caloric Requirements and Food Consumption Patterns of the Poor," NBER Working Papers 21697, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Consumer/Household Economics;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iaae18:277152. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.