Comparing international consumption patterns
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Date
2022
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Abstract
When attempting to identify empirical regularities in consumption patterns, their tremendous diversity across countries represents both a major opportunity and challenges, for example, consumers in rich countries devote less than 20 percent of their budget to food, while this rise to more than 50 percent in the poorest countries. This paper uses a major new database released in Selvanathan and Selvanathan (2003) to explore several related issues, including the extent to which the consumption basket is diversified and how this changes with income, whether a simple utility-maximizing model is capable of explaining the diversity of consumption patterns internationally, the measurement of the extent to which tastes differ across countries, and how the world can be partitioned into groups of countries with minimal within-group heterogeneity of tastes on the basis of the revealed preference of consumers.
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Cross country comparison, Consumption patters, income and price elasticticity