Date of Submission


Date of Award


Institute Name (Publisher)

Indian Statistical Institute

Document Type

Doctoral Thesis

Degree Name

Doctor of Philosophy

Subject Name

Quantitative Economics


Economic Research Unit (ERU-Kolkata)


Bhattacharya, Nikhilesh (ERU-Kolkata; ISI)

Abstract (Summary of the Work)

Studies on consumer behavicur : 4 surveyThis Chapter briefly reviews the methodology, implications and limitations of various approaches to empirical demand analysis and also sunmarises the important Indian contributions to this branch of econo- metric applications.The Hicks-Allen theory of consumer equil ibrium has been outlined first to indicate the nature of empirically ob servable restrictione that ensure consistent consumer behaviour in an essentially static world deal- ing solely with non-durable oommodities. The role of the assumption of separability of the utility function in quantitative applications has al so been stressed here. Finally, the sope and limitation of this theory has been discussed in the light of empirical exercises based on time- series and cros s-sectional data.In reviewing the methodology of engel curve analysis from cro8s- sectional data on household incomes and expenditures, different aspects of this approach, viz., choioe of variabl es and functional form in engel curve anelysis, and problems of measuring offects of various household charac teristics on consumption pattern, are discussed. The economio- theoretical as well as statisti al criteria of choosing the variables and functional form for engel curve analysis have been considered and references have been made to son problems of analysis of survey data on hous ahol d budget s, for instance, the presence of seasonal elements in the data, aplinntion of least squares method to data fron semples ici. are not sirple rand om ones.The discussion of the effect: of various household characteristics highl ights the role played by. them ir household decision-making process and describes the problems of incorpcrating these variables in engel curve analysis. There is also a separate di scussion on effects of household size snd composition on consumption pattern - a description of the standard formalations of engel curve involving the size and composition veriables. Specifically, Prais-Houthalkker's formulation of the engel ourve is the basis of discussion which ends with a review of the implications and 1 imitations of the unit consumer scales.Coming to the discussion of time series-based demand analyses, alternative models of demand systems e.g., the Linear Expenditure Systen, the Rotterdam model s, Direct and Indirect Addilog models etc., have been reviewed. There are also discussions on extensions, estimation proceđures and comparative performances of these models.There is a separate discussion on dynamic demand functions which seek to remove the static nature of syst em-models used in time series studies. Tro approaches to the investigation of dynamios of consumer behavicur, i,e., the utility-theoretic approach of Boulding, Craner, Phl ips and others and the nore straightforward approach of Stone and Hout hakker and Taylor have been reviewed here. The empirical results based on these dynamic models have been surveyed briefly.The final section of the present survey concentrates on Indian studies on empirical demand analysis covering, broadly, a review of metho- dology of engel curvo analysis and demand projections based on cross- secticn data and also studies based on time serics and time-series of cross section data.First of all, the method of engel curve analysis as adopted in Indian studies based on grouped expenditure data from the National Sample Survey, and the performances of alternative forms of engel curve to Indian data are examined.


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