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Comparing international consumption patterns

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  • Kenneth Clements

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  • Yanrui Wu
  • Jing Zhang

Abstract

When attempting to identify empirical regularities in consumption patterns, their tremendous diversity across countries represents both a major opportunity and challenge. For example, consumers in rich countries devote less than 20 percent of their budget to food, while this rises to more than 50 percent in the poorest countries. This paper uses a major new database released in Selvanathan and Selvanathan (2003) to explore several related issues, including the extent to which the consumption basket is diversified and how this changes with income, whether a simple utility-maximising model is capable of explaining the diversity of consumption patterns internationally, the measurement of the extent to which tastes differ across countries, and how the world can be partitioned into groups of countries with minimal within-group heterogeneity of tastes on the basis of the revealed preference of consumers.
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Suggested Citation

  • Kenneth Clements & Yanrui Wu & Jing Zhang, 2006. "Comparing international consumption patterns," Empirical Economics, Springer, vol. 31(1), pages 1-30, March.
  • Handle: RePEc:spr:empeco:v:31:y:2006:i:1:p:1-30 DOI: 10.1007/s00181-005-0012-y
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    References listed on IDEAS

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    1. Seale, James & Regmi, Anita & Bernstein, Jason, 2003. "International Evidence on Food Consumption Patterns," Technical Bulletins 184321, United States Department of Agriculture, Economic Research Service.
    2. Kenneth Clements & Yanrui Wu & Jing Zhang, 2006. "Comparing international consumption patterns," Empirical Economics, Springer, pages 1-30.
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    9. MacDonald, Ronald, 2000. "Concepts to Calculate Equilibrium Exchange Rates: An Overview," Discussion Paper Series 1: Economic Studies 2000,03, Deutsche Bundesbank, Research Centre.
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    11. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72, pages 584-584.
    12. Barten, Anton P, 1977. "The Systems of Consumer Demand Functions Approach: A Review," Econometrica, Econometric Society, vol. 45(1), pages 23-51, January.
    13. Clements, Kenneth W & Selvanathan, Antony & Selvanathan, Saroja, 1996. "Applied Demand Analysis: A Survey," The Economic Record, The Economic Society of Australia, vol. 72(216), pages 63-81, March.
    14. Ronald MacDonald & Peter B. Clark, 1998. "Exchange Rates and Economic Fundamentals; A Methodological Comparison of BEERs and FEERs," IMF Working Papers 98/67, International Monetary Fund.
    15. Kenneth Clements & Yanrui Wu & Jing Zhang, 2006. "Comparing international consumption patterns," Empirical Economics, Springer, pages 1-30.
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    Citations

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    Cited by:

    1. Amita Majumder & Ranjan Ray & Kompal Sinha, 2014. "A Unified Framework for the Estimation of Intra and Inter Country Food Purchasing Power Parities with Application to Cross Country Comparisons of Food Expenditure: India, Indonesia and Vietnam," Monash Economics Working Papers 31-14, Monash University, Department of Economics.
    2. Andreas Chai & Christian Kiedaisch & Nicholas Rohde, 2017. "The saturation of spending diversity and the truth about Mr Brown and Mrs Jones," Discussion Papers in Economics economics:201701, Griffith University, Department of Accounting, Finance and Economics.
    3. Chen, Quanrun & Dietzenbacher, Erik & Los, Bart & Yang, Cuihong, 2016. "Modeling the short-run effect of fiscal stimuli on GDP: A new semi-closed input–output model," Economic Modelling, Elsevier, vol. 58(C), pages 52-63.
    4. Yanrui Wu, 2004. "Understanding International Food Consumption Patterns," Economics Discussion / Working Papers 04-05, The University of Western Australia, Department of Economics.
    5. Kenneth Clements & Yanrui Wu & Jing Zhang, 2006. "Comparing international consumption patterns," Empirical Economics, Springer, pages 1-30.
    6. Lyons, Sean & Mayor, Karen & Tol, Richard S.J., 2009. "Convergence of consumption patterns during macroeconomic transition: A model of demand in Ireland and the OECD," Economic Modelling, Elsevier, vol. 26(3), pages 702-714, May.
    7. Amita Majumder & Ranjan Ray & Kompal Sinha, 2011. "Estimating Intra Country and Cross Country Purchasing Power Parities from Household Expenditure Data Using Single Equation and Complete Demand Systems Approach: India and Vietnam," Monash Economics Working Papers 34-11, Monash University, Department of Economics.
    8. Genovaitė Liobikienė & Justina Mandravickaitė, 2013. "Convergence of new members of the EU: changes in household consumption expenditure structure regarding environmental impact during the prosperous period," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 15(2), pages 407-427, April.
    9. Sommervoll, Dag Einar & Borgersen, Trond-Arne & Wennemo, Tom, 2010. "Endogenous housing market cycles," Journal of Banking & Finance, Elsevier, vol. 34(3), pages 557-567, March.
    10. Lucille Wong & Eliyathamby A. Selvanathan & Saroja Selvanathan, 2017. "Empirical analysis of Australian consumption patterns," Empirical Economics, Springer, pages 799-823.

    More about this item

    Keywords

    Cross-country comparisons; Consumption patterns; Income and price elasticities; D12; C20;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General

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