Chuo University

Market Demand on Family Expenditure Data in Japan

Email address: aruka@tamacc.chuo-u.ac.jp

Abstract:
Hidenbrand,Grandmont,Grodal and others have tried to formulate Market Demand by a procedure definitely different from the traditional way of using a utility function. The Slutzky Equation that is, the slope of an individualistic demand curve in the one commodity case, is as follows: [math omitted] Applying operator E to averaging among individual agents, [math omitted] First of all, E(s)<0 is a priori assumed. It then follows: R (x) is E(f2), the square mean of various demands of income level x , since R(x)=E(f2) [math omitted] The Larger the value of R(x),the diversity or heterogeneity of household demands at the similar income levels will be more. We can easily know the effects of variance in this model. R(x) therefore measures the spread of household demands. Given a density function of income distribution x, in general, E[R'(x)] depends on the rank of demand and also on the con .guration of income distribu- tion.Thus it turns out that these features,which support the Slutzky Equation are really demanding the empirical analysis. Hildenbrand in cooperation with Haerdle working in the .eld of nonpara- metric testing,in fact,estimated the matrices of second moments as well as covariance using the available data like UK Family Expenditure Survey (FES), French Enquete Budget de Famille (EBF) and the surveys in other developed countires but except for Japan.According to the above method,the author of this paper estimated the matrix of second moments as well as the matrix of covariance in the Family Expenditure Data in Japan of the period 1979-1998. The source comes from the volumes of the Annual Report on the Family Income and Expenditure issued by the Statistics Bureau,Managemen and Coordina- tion Agency,Governmen of Japan.The wo kinds of the estimation results may be summarized in terms of the second moment curves and variance curves.

PDF file of paper: aruka.pdf

Session: Consumer Demand Behavior

Time: Sunday, 8 July, 2:15pm - 3:45pm

Room: D