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Level of Income and its Distribution as Determinants of Korean Expenditure Patterns
Author(s) -
Fan Jessie X.,
AbdelGhany Mohamed,
Lee Yoon G.
Publication year - 2002
Publication title -
family and consumer sciences research journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.372
H-Index - 31
eISSN - 1552-3934
pISSN - 1077-727X
DOI - 10.1177/1077727x02030004005
Subject(s) - economics , distribution (mathematics) , consumer expenditure survey , permanent income hypothesis , demographic economics , income distribution , econometrics , household income , low income , aggregate expenditure , public economics , inequality , geography , life cycle hypothesis , macroeconomics , mathematics , mathematical analysis , archaeology
Even though the permanent income and relative income hypotheses have been utilized in past research to explain consumer behavior, no previous attempt has been made to integrate them into one model in explaining household expenditure behavior. In this article, the hypotheses are synthesized into a single model. The model was empirically tested using data from the 1996 Korean National Survey of Family Income and Expenditures. The results indicate that household expenditure behavior is generally explained by both hypotheses when integrated in one model. However, the impact of relative income and permanent income varies by expenditure categories.