EconPapers    
Economics at your fingertips  
 

Convergence of consumption patterns in the European Union

Nektarios Michail

Empirical Economics, 2020, vol. 58, issue 3, No 4, 979-994

Abstract: Abstract Preference homogeneity is important for both economic modelling and firm decisions. While homogeneity may be a stretched assumption and has been rejected in the existing literature, it is more useful to examine whether preferences are converging or diverging. The European Union (EU), and especially the euro area (EA) with the use of a single currency for 19 countries, are very suitable for the testing of this hypothesis. To this end, we employ 12 categories of consumption expenditure data for the 27 countries which comprise the EU to examine whether consumption patterns are converging. The results are supportive of the convergence hypothesis for the EU as a whole. However, convergence is found to be much greater in the EA countries compared to the extra-EA ones. Disaggregate results by expenditure category suggest that the hypothesis of divergence can be rejected in all, with the convergence rate being category specific. Overall, it appears that consumption patterns in the euro area appear to be converging to a common standard, at a rate approximately 50% faster than for the rest of the European Union.

Keywords: Convergence; Consumption patterns; European Union; Euro area (search for similar items in EconPapers)
JEL-codes: C33 D12 F02 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s00181-018-1578-5 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:58:y:2020:i:3:d:10.1007_s00181-018-1578-5

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

DOI: 10.1007/s00181-018-1578-5

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 ().

 
Page updated 2023-01-19
Handle: RePEc:spr:empeco:v:58:y:2020:i:3:d:10.1007_s00181-018-1578-5