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Demand behaviour in Spain during the last three decades: What is the ideal microeconomic model to represent consumer preferences?

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  • García, Lucia

Abstract

This paper analyses the recent evolution of Spanish Consumption at the household level. The main aim is to study different models to discover how best to represent consumer preferences of Spanish households. Results show that the theoretical microeconomic model that best fits is the dynamic Rotterdam model, with homogeneity and symmetry restrictions imposed. Furthermore, it is possible to show how household spending has evolved in recent years. Our work will contribute to an understanding of the evolution of consumption, which represents around 60% of Spain’s GDP. We provide empirical evidence, with OECD data for 36 years, taking as a sample the years from 1980 to 2015. Our central objective is to show the level of consumption for three decades, allowing us to understand the degree of development, wellbeing, and growth of Spain,and to analyze in detail consumer preferences by showing results for income and price elasticities. This study tracks the evolution of income elasticities and the differences between direct and crossed price elasticities, as well as Marshallian and Hicksian price elasticities.

Suggested Citation

  • García, Lucia, 2018. "Demand behaviour in Spain during the last three decades: What is the ideal microeconomic model to represent consumer preferences?," MPRA Paper 87937, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:87937
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    References listed on IDEAS

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    1. Jose Alberto Molina, 1998. "Analysing the effects of price changes on the cost of living of consumers using true indices," Applied Economics Letters, Taylor & Francis Journals, vol. 5(10), pages 639-644.
    2. Lluch, Constantino, 1971. "Consumer demand functions, Spain, 1958-1964," European Economic Review, Elsevier, vol. 2(3), pages 277-302.
    3. Ana Gil & José Molina, 2009. "Alcohol demand among young people in Spain: an addictive QUAIDS," Empirical Economics, Springer, vol. 36(3), pages 515-530, June.
    4. Molina Chueca, José Alberto, 1997. "Estimación de la estructura Intertemporal de la demanda de alimentos en España," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 7, pages 67-77, Junio.
    5. Mª José Lorenzo, 1988. "Sistemas completos de demanda para la economía española," Investigaciones Economicas, Fundación SEPI, vol. 12(1), pages 83-131, January.
    6. García, Lucia & Molina, José Alberto, 2017. "The household structure: recent international evolution," MPRA Paper 82049, University Library of Munich, Germany.
    7. Jose Alberto Molina, 1997. "Modelling the Spanish imports of vehicles using a source differentiated demand system," Applied Economics Letters, Taylor & Francis Journals, vol. 4(12), pages 751-755.
    8. José Molina, 2013. "Altruism in the household: in kind transfers in the context of kin selection," Review of Economics of the Household, Springer, vol. 11(3), pages 309-312, September.
    9. Lluch, Constantino, 1971. "Consumer demand functions, Spain, 1958-1964," European Economic Review, Elsevier, vol. 11(3), pages 277-302.
    10. Jose Alberto Molina, 1996. "Is Spanish consumer behaviour consistent with the utility maximization? A non-parametric response," Applied Economics Letters, Taylor & Francis Journals, vol. 3(4), pages 237-241.
    11. J. A. Molina, 1994. "Food Demand In Spain: An Application Of The Almost Ideal System," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(2), pages 252-258, May.
    12. Alley, Andrew G & Ferguson, Donald G & Stewart, Kenneth G, 1992. "An Almost Ideal Demand System for Alcoholic Beverages in British Columbia," Empirical Economics, Springer, vol. 17(3), pages 401-418.
    13. José Alberto Molina & Juan Carlos Campaña & Raquel Ortega, 2017. "Children’s interaction with the Internet: time dedicated to communications and games," Applied Economics Letters, Taylor & Francis Journals, vol. 24(6), pages 359-364, March.
    14. Kiefer, Nicholas M., 1984. "Microeconometric evidence on the neoclassical model of demand," Journal of Econometrics, Elsevier, vol. 25(3), pages 285-302, July.
    15. José Molina, 2015. "Caring within the Family: Reconciling Work and Family Life," Journal of Family and Economic Issues, Springer, vol. 36(1), pages 1-4, March.
    16. José Molina, 2014. "Altruism and monetary transfers in the household: inter- and intra-generation issues," Review of Economics of the Household, Springer, vol. 12(3), pages 407-410, September.
    17. Molina, Jose Alberto & Campaña, Juan Carlos & Ortega, Raquel, 2016. "Internet and the elderly in Spain: Time dedicated to search and communications," MPRA Paper 74419, University Library of Munich, Germany.
    18. José Alberto Molina & Juan Carlos Campaña & Raquel Ortega, 2016. "What do you prefer for a relaxing time at home: reading, watching TV or listening to the radio?," Applied Economics Letters, Taylor & Francis Journals, vol. 23(18), pages 1278-1284, December.
    19. José Alberto Molina Chueca, 1995. "Tratamiento de una Base de Datos Internacional: Homogeneización y Conversión en Paridades de Poder de Compra," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 4, pages 87-94, Diciembre.
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    Cited by:

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    More about this item

    Keywords

    Consumption; Demand Models; Spain (1980-2015);
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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