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Household Commodity Demand and Demographics in the Netherlands: A Micro-Economic Analysis

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  • Kalwij, A.S.
  • Alessie, R.J.M.
  • Fontein, P.F.

    (Tilburg University, Center for Economic Research)

Abstract

We investigate the effects of demographics, household expenditure and female employment on the allocation of household expenditure to consumer goods. For this purpose we estimate an Almost Ideal Demand System based on Dutch micro data. We find that interactions between household expenditure and demographics are of significant importance in explaining the allocation to consumer goods. As a consequence, consumer goods such as housing and clothing change with demographic characteristics from luxuries to necessities. Furthermore, this implies that budget and price-elasticities cannot be consistently estimated from aggregated data and that equivalence scales are not identified from budget survey data alone. We reject weak separability of consumer goods from female employment. A couple with an employed spouse has a smaller budget share for housing and personal care and a larger budget share for education, recreation & transport and clothing compared to a couple with a non-employed spouse.

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 1997-76.

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Date of creation: 1997
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Handle: RePEc:dgr:kubcen:199776

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Web page: http://center.uvt.nl

Related research

Keywords: demand systems; consumption; demographics;

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  1. J. A. Hausman, 1976. "Specification Tests in Econometrics," Working papers 185, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Blundell, Richard & Walker, Ian, 1986. "A Life-Cycle Consistent Empirical Model of Family Labour Supply Using Cross-Section Data," Review of Economic Studies, Wiley Blackwell, vol. 53(4), pages 539-58, August.
  3. Thomas Mroz, . "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions," University of Chicago - Population Research Center 84-8, Chicago - Population Research Center.
  4. Ray, Ranjan, 1983. "Measuring the costs of children : An alternative approach," Journal of Public Economics, Elsevier, vol. 22(1), pages 89-102, October.
  5. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, October.
  6. Barten, A. P., 1969. "Maximum likelihood estimation of a complete system of demand equations," European Economic Review, Elsevier, vol. 1(1), pages 7-73.
  7. Browning, Martin & Meghir, Costas, 1991. "The Effects of Male and Female Labor Supply on Commodity Demands," Econometrica, Econometric Society, vol. 59(4), pages 925-51, July.
  8. Pollak, Robert A & Wales, Terence J, 1979. "Welfare Comparisons and Equivalence Scales," American Economic Review, American Economic Association, vol. 69(2), pages 216-21, May.
  9. Aldershof, T. & Alessie, R.J.M. & Kapteyn, A., 1997. "Female labor supply and the demand for housing," Discussion Paper 97.46, Tilburg University, Center for Economic Research.
  10. Nelson, J.A., 1991. ""Indendent of a Base" Equivalence Scales Estimation Using United States Micro-Level Data," Papers 392, California Davis - Institute of Governmental Affairs.
  11. Pashardes, Panos, 1991. "Contemporaneous and intertemporal child costs : Equivalent expenditure vs. equivalent income scales," Journal of Public Economics, Elsevier, vol. 45(2), pages 191-213, July.
  12. Kapteyn, Arie, 1994. "The Measurement of Household Cost Functions: Revealed Preference versus Subjective Measures," Journal of Population Economics, Springer, vol. 7(4), pages 333-50, November.
  13. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
  14. Blundell, Richard & Pashardes, Panos & Weber, Guglielmo, 1993. "What Do We Learn About Consumer Demand Patterns from Micro Data?," American Economic Review, American Economic Association, vol. 83(3), pages 570-97, June.
  15. Kapteyn, A.J., 1994. "The measurement of household cost functions: Revealed preference versus subjective measures," Discussion Paper 1994-3, Tilburg University, Center for Economic Research.
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