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Income Elasticities for Selected Consumption Categories: Comparison of Single Female‐Headed and Two‐Parent Families
Author(s) -
Horton Sally E.,
Hafstrom Jeanne L.
Publication year - 1985
Publication title -
home economics research journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.372
H-Index - 31
eISSN - 1552-3934
pISSN - 0046-7774
DOI - 10.1177/1077727x8501300308
Subject(s) - consumption (sociology) , economics , demographic economics , permanent income hypothesis , family income , population , instrumental variable , consumer expenditure survey , engel curve , labour economics , demography , econometrics , economic growth , public economics , sociology , social science , aggregate expenditure , finance , market liquidity , price index
Female‐headed families—those maintained by a woman without a husband present—although a fast‐growing population group since the '70s, have so far received little or no attention from researchers in the consumption area. Thus the major focus of this study was to examine changes in expenditure behavior of female‐headed families with changes in income, and to compare those changes with two‐parent families. Data are from the 1972–73 Consumer Expen diture Survey of the Bureau of Labor Statistics. The two samples consisted of 590 female‐headed families and 4,881 two‐parent families. Total expenditures and expenditures on six consumption categories were modeled as functions of cur rent and permanent income using the double log form. Family size, age and education, employment status of the woman, race, location, and house tenure were included as proxies for tastes and preferences to hold them constant. Cur rent income elasticities were estimated by generalized least squares, and per manent income elasticities by instrumental variables. Only income elasticities for shelter, both current and permanent, differed significantly between the groups. Both family types change shelter spending less than proportionally to an income change, but female‐headed families change less than two‐parent families. Dif ferential effects of the independent variables, measured by Engel function pa rameters using permanent income, were found for the two family types. Impli cations for future research are discussed.