IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v36y2004i5p497-504.html
   My bibliography  Save this article

Decomposition analysis of consumers' demand changes: an application to Greek consumption data

Author

Listed:
  • Giannis Karagiannis
  • Kostas Velentzas

Abstract

A decomposition analysis for consumer demand functions is developed. Changes in Marshallian demand or expenditure shares functions over time are decomposed into a total substitution effect, an income effect, and a habit effect. This framework is applied to post-war Greek consumption patterns through a habit persistence version of the Quadratic Almost Ideal Demand System (QUAIDS). It is found that for all commodity categories (i.e., food, beverages and tobacco, footwear and clothing, settling and housing, and others) the income effect was the main driving force in explaining changes in both quantity demanded and expenditure shares, followed by habit and total substitution effects.

Suggested Citation

  • Giannis Karagiannis & Kostas Velentzas, 2004. "Decomposition analysis of consumers' demand changes: an application to Greek consumption data," Applied Economics, Taylor & Francis Journals, vol. 36(5), pages 497-504.
    • Handle: RePEc:taf:applec:v:36:y:2004:i:5:p:497-504
    DOI: 10.1080/00036840410001682205
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00036840410001682205
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036840410001682205?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    References listed on IDEAS

    as
    1. Giannis Karagiannis & Kostas Velentzas, 1997. "Explaining Food Consumption Patterns In Greece," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1‐3), pages 83-92, January.
    2. P. Y. Chen & M. M. Veeman, 1991. "An Almost Ideal Demand System Analysis for Meats with Habit Formation and Structural Change," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 39(2), pages 223-235, July.
    3. 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.
    4. 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 570-597, June.
    5. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
    6. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Biondi, Beatrice & Castiglione, Concetta & Mazzocchi, Mario, 2021. "Demand drivers and changes in food-related emissions in the UK: A decomposition approach," Ecological Economics, Elsevier, vol. 188(C).
    2. Dai, Hancheng & Masui, Toshihiko & Matsuoka, Yuzuru & Fujimori, Shinichiro, 2012. "The impacts of China’s household consumption expenditure patterns on energy demand and carbon emissions towards 2050," Energy Policy, Elsevier, vol. 50(C), pages 736-750.
    3. Frank T. Denton & Dean C. Mountain, 2007. "Exploring the Effects of Aggregation Error in the Estimation of Consumer Demand Elasticities," Social and Economic Dimensions of an Aging Population Research Papers 226, McMaster University.
    4. Dong, Fengxia, 2006. "The outlook for Asian dairy markets: The role of demographics, income, and prices," Food Policy, Elsevier, vol. 31(3), pages 260-271, June.
    5. Erkan Erdil, 2006. "Demand systems for agricultural products in OECD countries," Applied Economics Letters, Taylor & Francis Journals, vol. 13(3), pages 163-169.
    6. Paul Preckel & J. A. L. Cranfield & Thomas Hertel, 2010. "A modified, implicit, directly additive demand system," Applied Economics, Taylor & Francis Journals, vol. 42(2), pages 143-155.
    7. Shashika D. Rathnayaka & Saroja Selvanathan & E. A. Selvanathan, 2021. "Demand for animal‐derived food in selected Asian countries: A system‐wide analysis," Agricultural Economics, International Association of Agricultural Economists, vol. 52(1), pages 97-122, January.
    8. 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.
    9. Camilo Sarmiento & Richard Just, 2005. "Empirical modelling of the aggregation error in the representative consumer model," Applied Economics, Taylor & Francis Journals, vol. 37(10), pages 1163-1175.
    10. Tite Ehuitché Beke, 2017. "Analysis of Substitute Products in the Demand for Food Products in Côte d'Ivoire," Working Papers 330, African Economic Research Consortium, Research Department.
    11. Michael Fesseha Yohannes & Toshinobu Matsuda, 2016. "Weather Effects on Household Demand for Coffee and Tea in Japan," Agribusiness, John Wiley & Sons, Ltd., vol. 32(1), pages 33-44, January.
    12. Toshinobu Matsuda, 2007. "Linearizing the inverse quadratic almost ideal demand system," Applied Economics, Taylor & Francis Journals, vol. 39(3), pages 381-396.
    13. Denton, Frank T. & Mountain, Dean C., 2011. "Exploring the effects of aggregation error in the estimation of consumer demand elasticities," Economic Modelling, Elsevier, vol. 28(4), pages 1747-1755, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andres Silva & Senarath Dharmasena, 2016. "Considering seasonal unit root in a demand system: an empirical approach," Empirical Economics, Springer, vol. 51(4), pages 1443-1463, December.
    2. Barnett, William A. & Erwin Diewert, W. & Zellner, Arnold, 2011. "Introduction to measurement with theory," Journal of Econometrics, Elsevier, vol. 161(1), pages 1-5, March.
    3. Stefan Hoderlein & Hajo Holzmann & Alexander Meister, 2015. "The triangular model with random coefficients," CeMMAP working papers 33/15, Institute for Fiscal Studies.
    4. Xavier Labandeira & José M. Labeaga & Miguel Rodríguez, 2006. "A Residential Energy Demand System for Spain," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 87-112.
    5. Brannlund, Runar & Nordstrom, Jonas, 2004. "Carbon tax simulations using a household demand model," European Economic Review, Elsevier, vol. 48(1), pages 211-233, February.
    6. Labandeira, Xavier & Labeaga, José M. & Rodríguez, Miguel, 2009. "An integrated economic and distributional analysis of energy policies," Energy Policy, Elsevier, vol. 37(12), pages 5776-5786, December.
    7. Frank Denton & Dean Mountain, 2004. "Aggregation effects on price and expenditure elasticities in a quadratic almost ideal demand system," Canadian Journal of Economics, Canadian Economics Association, vol. 37(3), pages 613-628, August.
    8. Frank T. Denton & Dean C. Mountain, 2016. "Biases in consumer elasticities based on micro and aggregate data: an integrated framework and empirical evaluation," Empirical Economics, Springer, vol. 50(2), pages 531-560, March.
    9. Paula Carvalho Pereda & Denisard Cneio de Oliveira Alves, 2008. "Demand for Nutrients in Brazil," Anais do XXXVI Encontro Nacional de Economia [Proceedings of the 36th Brazilian Economics Meeting] 200807211136590, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    10. Toshinobu Matsuda, 2006. "A trigonometric flexible consumer demand system," Canadian Journal of Economics, Canadian Economics Association, vol. 39(1), pages 145-162, February.
    11. Douglas Fisher & Adrian R. Fleissig & Apostolos Serletis, 2006. "An Empirical Comparison of Flexible Demand System Functional Forms," World Scientific Book Chapters, in: Money And The Economy, chapter 13, pages 247-277, World Scientific Publishing Co. Pte. Ltd..
    12. Frank Denton & Dean Mountain, 2014. "The implications of mean scaling for the calculation of aggregate consumer elasticities," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(3), pages 297-314, September.
    13. Witterblad, Mikael, 2008. "Essays on Redistribution and Local Public Expenditures," Umeå Economic Studies 731, Umeå University, Department of Economics.
    14. Frank T. Denton & Dean C. Mountain, 2011. "Aggregation and Other Biases in the Calculation of Consumer Elasticities for Models of Arbitrary Rank," Quantitative Studies in Economics and Population Research Reports 447, McMaster University.
    15. Bruno Palialol & Paula Pereda, 2019. "In-kind transfers in Brazil: household consumption and welfare effects," Working Papers, Department of Economics 2019_26, University of São Paulo (FEA-USP).
    16. Mette Lunde Christensen, 2002. "Heterogeneity in consumer demands and the income effect: evidence from panel data," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 C4-1, International Conferences on Panel Data.
    17. Lyssiotou, Panayiota & Pashardes, Panos & Stengos, Thanasis, 2002. "Nesting quadratic logarithmic demand systems," Economics Letters, Elsevier, vol. 76(3), pages 369-374, August.
    18. Regmi, Madhav & Featherstone, Allen M., 2017. "Farm Households Consumption Heterogeneity And Rural Business Dynamics," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252755, Southern Agricultural Economics Association.
    19. Nordström, Jonas & Thunström, Linda, 2009. "The impact of tax reforms designed to encourage healthier grain consumption," Journal of Health Economics, Elsevier, vol. 28(3), pages 622-634, May.
    20. Gallet, Craig A., 2010. "The income elasticity of meat: a meta-analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), pages 1-14.

    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:taf:applec:v:36:y:2004:i:5:p:497-504. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.