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A Re-examination of Private Consumption in Fiji

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  • Kumar, Saten

Abstract

Recently the Reserve Bank of Fiji (RBF) claimed that private consumption expenditure in Fiji has grown considerably in past years. For policy purposes, it is important to re-investigate the determinants of consumption in Fiji. This paper used alternative time series techniques to estimate real private consumption for Fiji using annual data from 1975-2005. It is found that the income and availability of consumer credit elasticities are significant and plausible. A stable real private consumption function is also attained using CUSUM and CUSUMSQ tests.

Suggested Citation

  • Kumar, Saten, 2009. "A Re-examination of Private Consumption in Fiji," MPRA Paper 18706, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:18706
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    References listed on IDEAS

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    1. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
    2. B Bhaskara Rao, 2005. "Testing Permanent Income Hypothesis for Fiji," Macroeconomics 0511013, University Library of Munich, Germany.
    3. Campbell, John Y & Mankiw, N Gregory, 1990. "Permanent Income, Current Income, and Consumption," Journal of Business & Economic Statistics, American Statistical Association, vol. 8(3), pages 265-279, July.
    4. Molana, H, 1991. "The Time Series Consumption Function: Error Correction, Random Walk and the Steady-State," Economic Journal, Royal Economic Society, vol. 101(406), pages 382-403, May.
    5. B. Bhaskara Rao, 2005. "Testing Hall's permanent income hypothesis for a developing country: the case of Fiji," Applied Economics Letters, Taylor & Francis Journals, vol. 12(4), pages 245-248.
    6. Davidson, James E H, et al, 1978. "Econometric Modelling of the Aggregate Time-Series Relationship between Consumers' Expenditure and Income in the United Kingdom," Economic Journal, Royal Economic Society, vol. 88(352), pages 661-692, December.
    7. Flavin, Marjorie A, 1981. "The Adjustment of Consumption to Changing Expectations about Future Income," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 974-1009, October.
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    Cited by:

    1. Rup Singh & Saten Kumar, 2010. "Some empirical evidence on the demand for money in the Pacific Island countries," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 27(3), pages 211-222, August.
    2. Kumar, Saten & Singh, Rup, 2009. "Some Empirical Evidence on the Demand for Money in the Pacific Island Countries," MPRA Paper 18703, University Library of Munich, Germany.
    3. Saten Kumar, 2011. "Cointegration and the demand for energy in Fiji," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 35(1), pages 85-97.
    4. Kumar, Saten, 2011. "Financial reforms and money demand: Evidence from 20 developing countries," Economic Systems, Elsevier, vol. 35(3), pages 323-334, September.

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    More about this item

    Keywords

    Real Private Consumption; Income Elasticity and Availability of Consumer Credit Elasticity.;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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