ESTIMATING INCREASE IN CONSUMER DEMAND FROM HOUSEHOLD EXPENDITURE SURVEY DATA

An alternative method of estimating the increase in consumer demand for various consumption items is presented. The present method of estimating the increase in consumer demand differs from those of previous studies in two respects, viz., an arbitrary Engel function rather than the double log, and an equation of the Lorenz curve instead of a density function for income distribution. The present method of estimating the increase in consumer demand with respect to changes in total expenditure and total expenditure inequality makes an empirical contribution in the field. The Australian Household Expenditure Survey 1975-76 data are used for this purpose. Many interesting observations are made, and in some cases the empirical results contradict with the previous findings.