Empirical analysis of Australian consumption patterns

Lucille Wong, Eliyathamby Selvanathan and Saroja Selvanathan
Additional contact information
Lucille Wong: Griffith University

Empirical Economics, 2017, vol. 52, issue 2, No 15, 799-823

Abstract: Abstract This paper presents an empirical analysis of Australian private consumption patterns utilising a system-wide approach to analyse how the dominant component, private consumption, is allocated among ten broad groups of consumer goods. Australian consumers, on average, allocate about two-thirds of their income on food, housing, transport and recreation. We considered three demand models, the AIDS, Rotterdam and CBS demand systems, for estimation. The estimated income elasticities reveal that food, alcohol and tobacco, housing and medical care are necessities. All the own-price elasticities are negative and less than one in absolute value (except for recreation), indicating that demand for most goods is price inelastic. In addition, we tested the demand theory hypotheses, homogeneity, Slutsky symmetry and preference independence and found them to be acceptable.

Keywords: Private consumption; Demand models; Information inaccuracy; Elasticities (search for similar items in EconPapers)
JEL-codes: C52 D12 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s00181-016-1095-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:empeco:v:52:y:2017:i:2:d:10.1007_s00181-016-1095-3

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-016-1095-3

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().