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Estimation of income elasticities from Lorenz concentration curves: application to Canadian micro‐data
Author(s) -
AbdelGhany Mohamed,
Gehlken Amy,
Silver J. Lew
Publication year - 2002
Publication title -
international journal of consumer studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.775
H-Index - 71
eISSN - 1470-6431
pISSN - 1470-6423
DOI - 10.1046/j.1470-6431.2002.00254.x
Subject(s) - engel curve , lorenz curve , economics , econometrics , income elasticity of demand , estimation , income distribution , mathematics , economic inequality , gini coefficient , price index , inequality , mathematical analysis , management
This study uses a method of estimating income elasticities of major Canadian expenditure groups. The technique is based on the implicit Engel functions derived from the Lorenz curve of permanent income and concentration curves of group‐specific expenditures. The methodology is applied to The 1996 Canadian Family Expenditure Survey. Results indicate that income elasticities for the majority of the broad expenditure categories considered in the study are inelastic and they increase monotonically with income.