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On the Estimation of Total Expenditure Elasticities from Derived Engel Functions with Applications to Australian Micro‐Data

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  • BINH TRAN‐NAM
  • NRIPESH PODDER

Abstract

This paper proposes a method of estimating total expenditure elasticities based on the implicit Engel equations derived from the Lorenz curve of total expenditure and concentration curves of commodity‐specific expenditures. The proposed procedure is computationally easy to implement and produces elasticity estimates which appear to satisfy the adding‐up criterion well For illustration, the method is applied to the 1984 Household Expenditure Survey and an attempt is made to compare the present estimates with those generated in previous Australian studies.

Suggested Citation

  • Binh Tran‐Nam & Nripesh Podder, 1992. "On the Estimation of Total Expenditure Elasticities from Derived Engel Functions with Applications to Australian Micro‐Data," The Economic Record, The Economic Society of Australia, vol. 68(2), pages 142-150, June.
    • Handle: RePEc:bla:ecorec:v:68:y:1992:i:2:p:142-150
    DOI: 10.1111/j.1475-4932.1992.tb01759.x
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    References listed on IDEAS

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    1. David E. A. Giles & Peter Hampton, 1985. "An Engel Curve Analysis of Household Expenditure in New Zealand," The Economic Record, The Economic Society of Australia, vol. 61(1), pages 450-462, March.
    2. Kakwani, N C & Podder, N, 1973. "On the Estimation of Lorenz Curves from Grouped Observations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(2), pages 278-292, June.
    3. N. Podder, 1971. "Patterns of Household Consumption Expenditures in Australia," The Economic Record, The Economic Society of Australia, vol. 47(3), pages 379-398, September.
    4. Giles, David E A & Hampton, Peter, 1985. "An Engel Curve Analysis of Household Expenditure in New Zealand," The Economic Record, The Economic Society of Australia, vol. 61(172), pages 450-462, March.
    5. R. A. Bewley, 1982. "On the Functional Form of Engel Curves: The Australian Household Expenditure Survey 1975–76," The Economic Record, The Economic Society of Australia, vol. 58(1), pages 82-91, March.
    6. Kakwani, Nanak C & Podder, N, 1976. "Efficient Estimation of the Lorenz Curve and Associated Inequality Measures from Grouped Observations," Econometrica, Econometric Society, vol. 44(1), pages 137-148, January.
    7. Datt, Gaurav, 1988. "Estimating Engel Elasticities with Bootstrap Standard Errors," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 50(3), pages 325-333, August.
    8. Kakwani, Nanak, 1978. "A new method of estimating Engel elasticities," Journal of Econometrics, Elsevier, vol. 8(1), pages 103-110, August.
    9. Kakwani, Nanak, 1977. "On the estimation of Engel elasticities from grouped observations with application to Indonesian data," Journal of Econometrics, Elsevier, vol. 6(1), pages 1-19, July.
    10. Podder, N, 1971. "Patterns of Household Consumption Expenditures in Australia," The Economic Record, The Economic Society of Australia, vol. 47(119), pages 379-398, September.
    11. Bewley, R A, 1982. "On the Functional Form of Engel Curves: The Australian Household Expenditure Survey, 1975-76," The Economic Record, The Economic Society of Australia, vol. 58(160), pages 82-91, March.
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    Cited by:

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    2. Hansen, Julia L. & Formby, John P. & Smith, W. James, 1998. "Estimating the Income Elasticity of Demand for Housing: A Comparison of Traditional and Lorenz-Concentration Curve Methodologies," Journal of Housing Economics, Elsevier, vol. 7(4), pages 328-342, December.
    3. Hisham S. El‐Osta, 2010. "Inequality decomposition of farm family living expenditures and the role of the life cycle," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 70(2), pages 245-266, August.

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