Linkages between Household Budget Allocations and Welfare Changes: Implications of Habit Formation and Price EffectsLinkages between Household Budget Allocations and Welfare Changes: Implications of Habit Formation and Price Effects
- Other Titles
- Linkages between Household Budget Allocations and Welfare Changes: Implications of Habit Formation and Price Effects
- Authors
- 서동희
- Issue Date
- 2021
- Publisher
- 한국농업경제학회
- Keywords
- budget allocation; compensating variation; dynamic almost ideal demand system; habit formation; income effect; substitution effect
- Citation
- 농업경제연구, v.62, no.3, pp.201 - 220
- Indexed
- KCI
- Journal Title
- 농업경제연구
- Volume
- 62
- Number
- 3
- Start Page
- 201
- End Page
- 220
- URI
- https://scholar.korea.ac.kr/handle/2021.sw.korea/138171
- ISSN
- 0549-6047
- Abstract
- This study examines households’ habit formation in consumption and investigates how household budget allocations are related to welfare changes. The results of the dynamic almost ideal demand system show that there exist habit persistence in purchasing food, clothing, housing, and health items and depletion in other items. Regarding the price responsiveness, the results reveal that price changes result in household budget reallocations with varying income and substitution effects. Moreover, the compensating variations are used to measure welfare changes between 2003 and 2016. The results represent that the increased prices result in welfare losses despite households’ budget reallocations across all income quintiles.
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Collections - College of Life Sciences and Biotechnology > Department of Food and Resource Economics > 1. Journal Articles
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