Changes in financial policy are expected to result in the greater availability of credit as financial controls are relaxed and banking competition is increased. This ‘financial deepening’ should show up in ahigher consumption expenditure in areas where credit is often required, such as durable consumption, education and health. We use the household consumption data collected by India’s National Sample Survey Organisation for 11 rounds which straddle the period before and during financial liberalization (i.e. 1987-2000).We generate measures of the within-households shifts in distribution of consumption and see how far these are correlated with financial development variables. We find that at the macro level, financial depth did not increase from the beginning to the end of the period under study. However we did find some association between some of the financial development variables and expenditure on durables goods, although the changes in behaviour are very small.
Keywords:Financial liberalization; financial depth; durables; household consumption; credit. (search for similar items in EconPapers) JEL-codes:D12O12O16O23 (search for similar items in EconPapers) New Economics Papers: this item is included in nep-cwa, nep-dev and nep-fmk Date: 2005-12 Note: This paper is an output of Research Project R7968 ‘The Effects of Macro-financial policy on household micro-financial behaviour’ funded by the Department for International Development (DFID) Social Science Research (formerly ESCOR). The views expressed here do not necessarily represent those of DFID. Thanks are due to Ibo Longjam, Peter Quartey and Tarja Viitanen for research assistance at various stages of the project. The views expressed here do not necessarily represent those of DFID. References:Add references at CitEc CitationsTrack citations by RSS feed
Ordering information: This working paper can be ordered from Centre for Economic Research, Research Institute for Public Policy and Management, Keele University, Staffordshire ST5 5BG - United Kingdom http://www.keele.ac.uk/depts/ec/cer/pubs_kerps.htm
More papers in Keele Economics Research Papers from Centre for Economic Research, Keele University Address: Department of Economics, University of Keele, Keele, Staffordshire, ST5 5BG - United Kingdom Contact information at EDIRC. Series data maintained by Martin E. Diedrich (). This e-mail address is bad, please contact .