An analysis of urban household expenditure pattern in China

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An analysis of urban household expenditure pattern in China

 

Author: Choi, Mei-ling Cary
Title: An analysis of urban household expenditure pattern in China
Degree: M.Sc.
Year: 2000
Subject: Cost and standard of living -- China
Home economics -- Accounting
Consumption (Economics) -- China
Hong Kong Polytechnic University -- Dissertations
Department: Multi-disciplinary Studies
Dept. of Business Studies
Pages: vii, 111 leaves : ill. (some col.) ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1538382
URI: http://theses.lib.polyu.edu.hk/handle/200/2273
Abstract: The study bases on annual Chinese urban households' data for the years 1981-1998, it analyzes the expenditure pattern of consumer goods and services for urban households in China. Along with an increase over threefold in real per capita income of Chinese urban households from 1981 to 1998, the economic reform also induced changes in expenditure pattern of urban households in China. To better understand the consumer behaviors in the fragmented markets of the central and western region, expenditure pattern of urban households in the eastern, central and western regions will be compared. Consumption commodities are grouped into 11 categories: They are food, clothing, tobacco, liquor and tea, durables, culture and recreation, education, fuels, medicine and medical service, housing, transportation and communications, and miscellaneous. Expenditure pattern of urban households in China will be revealed through the analysis on the change of their mean budget share on each commodity group for the period of 1981-1998 and across the three regions. Income elasticity of demand on each commodity group for urban households in the three regions will be estimated by linear-logarithmic function of Engel curve. The analysis reveals the budget share on food, tobacco, liquor and tea, clothing, durables, culture and recreation decreased; on the other hand, budget share on housing, fuels, medicine and medical service, transportation and communication, and other living expenditure rose for the period of 1981-1998. The changes of budget share on food, tobacco, liquor and tea, and clothing in 1980s were largely induced by the changes in price level. While, the shift of urban households' expenditure pattern in 1990s should be attributed to the institutional changes on housing, education and medical service. Obvious differences in the expenditure patterns between the urban households in the three regions were found. Urban households in the eastern region spent proportionally more of their income on food, article for daily use, housing, and transportation and communication, whereas urban households in the central region use larger portion of income on education and fuels. Households in the western region spent a larger portion of their income on tobacco, liquor and tea, clothing, and medicine and medical service. Income elasticity was measured by the use of double-logarithm function. The result was fine marked by the high value of R2 and t-value. The result showed that education, transportation and communications, housing and miscellaneous were luxury goods for all regions. While the other commodity groups are normal goods. Regional comparison reveals that the demand for food, article for daily use, culture and recreation, and housing of urban households in the eastern region, transportation and communication, fuels, education, and clothing of those in the central region and medicine and medical service, and tobacco, liquor and tea of those in the western region were income elastic.

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