Changing Household Demand Patterns in the Netherlands: some explanations

Adriaan Kalwij and Wiemer Salverda

DEMPATEM Working Papers from AIAS, Amsterdam Institute for Advanced Labour Studies

Abstract: We examine in detail the changes in household expenditures patterns, and in particular services related expenditures, in the Netherlands over the years 1979, 1989 and 1998. Using Engel curve estimations, these changes are related to changes in household demographics, employment, the budget and relative prices. We find that the dominating changes in demand are decreasing shares of expenditures on food and clothing and an increasing share of expenditures on housing. We show that the decrease in food expenditures is for a large part explained by changes in household characteristics and the budget and about a third is a price effect. The increase in housing expenditures share is predominantly a price effect. Excluding expenditures on housing, health and education and durables, the increase in the budget share of all services is 13.6 %-points. We show that 2.7%-points of this increase is explained by demographic changes and 2.9%-points by price changes. Changes in the employment structure and the budget explain relatively little changes (0.3%-points), leaving 7.7%-points unexplained.

Date: 2004-02
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