IDEAS home Printed from https://ideas.repec.org/a/bla/scandj/v116y2014i2p335-355.html
   My bibliography  Save this article

Heterogeneity in Consumer Demands and the Income Effect: Evidence from Panel Data

Author

Listed:
  • Mette Christensen

Abstract

This paper uses unique Spanish panel data on household expenditures to test whether unobservable heterogeneity in household demands (taste, etc.) is correlated with total expenditures (income). The main finding is that tastes are indeed correlated with income for about half of the goods considered, implying that cross-sectional estimates of income elasticities for these goods are biased. The goods are the following: food eaten outside home, alcohol and tobacco, transportation, and energy. The elasticity of alcohol and tobacco is more than halved when taking unobserved heterogeneity into account. For transportation, the bias is sufficiently large to misclassify the good as a luxury.

Suggested Citation

  • Mette Christensen, 2014. "Heterogeneity in Consumer Demands and the Income Effect: Evidence from Panel Data," Scandinavian Journal of Economics, Wiley Blackwell, vol. 116(2), pages 335-355, April.
  • Handle: RePEc:bla:scandj:v:116:y:2014:i:2:p:335-355
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/sjoe.12049
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

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


    Cited by:

    1. François Gardes, 2021. "Endogenous Prices in a Riemannian Geometry Framework," Post-Print halshs-03325414, HAL.
    2. Stefan Hoderlein & Jörg Stoye, 2015. "Testing stochastic rationality and predicting stochastic demand: the case of two goods," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(2), pages 313-328, October.
    3. Hjertstrand, Per, 2020. "Income Elasticities Without Parameters," Working Paper Series 1324, Research Institute of Industrial Economics.
    4. François Gardes, 2021. "Endogenous Prices in a Riemannian Geometry Framework," Documents de travail du Centre d'Economie de la Sorbonne 21026, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    5. Alexander Osharin & Valery Verbus, 2018. "Heterogeneity of consumer preferences and trade patterns in a monopolistically competitive setting," Journal of Economics, Springer, vol. 125(3), pages 211-237, November.
    6. François Gardes, 2021. "Endogenous Prices in a Riemannian Geometry Framework," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-03325414, HAL.

    More about this item

    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:bla:scandj:v:116:y:2014:i:2:p:335-355. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442 .

    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.

    We have no bibliographic references for this item. You can help adding them by using 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: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442 .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.