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Income Effects on Services Expenditures

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Author Info
Francois Gardes () (University of Paris 1)
Christophe Starzec () (Team, INSEE)
Abstract

Engel curves suffer from the fact that habit or addiction effects are not taken into account on cross sections. Also, income effects may differ between social groups, and cross-section parameters may be biased relatively to time-series estimations. We propose to estimate dynamic Engel curves on individual cross-section data using a new instrumentation of past expenditures based on cohort effects and compare the influence of income changes according to static and dynamic estimates. Finally, a domestic production model allows to calculate the opportunity cost of domestic activities and to explain the difference between the U.S. and European expenditures on services. The article uses the 1979, 1984, 1989 and 1995 Insee Family budget surveys.

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Paper provided by AIAS, Amsterdam Institute for Advanced Labour Studies in its series DEMPATEM Working Papers with number wp7.

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Date of revision: Feb 2004
Handle: RePEc:aia:dempat:wp7

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Altonji, Joseph G & Siow, Aloysius, 1987. "Testing the Response of Consumption to Income Changes with (Noisy) Panel Data," The Quarterly Journal of Economics, MIT Press, vol. 102(2), pages 293-328, May. [Downloadable!] (restricted)
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  2. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November. [Downloadable!] (restricted)
  3. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January. [Downloadable!] (restricted)
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  1. Shiyuan Chen & Sally Wallace, 2009. "Food Consumption in Jamaica: A Household and Social Behavior," International Studies Program Working Paper Series, at AYSPS, GSU paper0901, International Studies Program, Andrew Young School of Policy Studies, Georgia State University. [Downloadable!]
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