Consumption Optimization in G7 Countries: Evidence of Heterogeneous Asymmetry in Income and Price Differentials

Emmanuel Uche, Bisharat Hussain Chang () and Raheel Gohar ()
Additional contact information
Emmanuel Uche: Department of Economics, Abia State University, Uturu, Abia State, Nigeria
Bisharat Hussain Chang: ��Department of Management Sciences, Shaheed Zulfikar Ali Bhutto Institute of Science and Technology, Larkana Campus Larkana, Pakistan
Raheel Gohar: ��College of Business Administration, Al Yamamah University, Riyadh, Saudi Arabia

Journal of International Commerce, Economics and Policy (JICEP), 2022, vol. 13, issue 01, 1-23

Abstract: The lack of comprehensive empirical narratives about the effects of income and price differentials, as well as possible distributional asymmetries on consumption in G7 countries, compelled this study by using both ARDL and Quantile ARDL models. NARDL results indicate that positive shocks in income have significant and positive effects on consumption in all countries. Moreover, evidence from the Quantile ARDL model indicates that positive and significant impacts were momentary except at the 95th quantile of consumption distributions in Canada. Furthermore, price variations negatively affected consumption in all G7 countries and across all distributions, with evidence of panic buying in Italy, the US and at the 5th quantile in Japan. Meanwhile, there is evidence of asymmetric effects from income and price variations on consumption in all G7 countries, whereas the influence of income variations on consumption is heterogeneous in Canada. Moreover, the asymmetric effects of price differentials were consistent across all the distributions in all the countries. Overall, to ensure consumption optimization and by extension, economic growth, differentiated policies to respond to income and price variations at all times are of the essence.

Keywords: Consumption; income; prices; G7 countries; distributional asymmetry; nonlinear ARDL; quantile ARDL (search for similar items in EconPapers)
JEL-codes: C22 E31 F31 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S1793993322500028
Access to full text is restricted to subscribers

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:wsi:jicepx:v:13:y:2022:i:01:n:s1793993322500028

Ordering information: This journal article can be ordered from

DOI: 10.1142/S1793993322500028

Access Statistics for this article

Journal of International Commerce, Economics and Policy (JICEP) is currently edited by Ramkishen S. Rajan

More articles in Journal of International Commerce, Economics and Policy (JICEP) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().