EXPENDITURE PATTERNS AND AGGREGATE CONSUMER-BEHAVIOR - SOME EXPERIMENTS WITH AUSTRALIAN AND NEW-ZEALAND DATA

This paper analyzes expenditure patterns in Australia and New Zealand by estimating 'complete' demand systems on budget data. Tests of linear Engel curves and separable preferences are carried our on both data sets. The study also exploits the information on household composition to test for demographic effects. Several new demographically extended demand functional forms are proposed and estimated, find their behavioural and welfare implications in terms of equivalence scales compared. The study yields plausible estimates of price and expenditure elasticities and shows that relevant price information can be used successfully to estimate the 'cost' of a child.