Date of Award
Doctor of Philosophy
Human Development and Family Studies
Consumer demand theory has long dominated the study of household consumption behavior. This theory, however, incorporates only the effects of prices and income on consumer demand, with tastes as given. In addition, most previous empirical studies have been applying this theory to aggregate data and to an incomplete household expenditure/demand system;This study draws attention to the use of household characteristics in household demand analysis. The main goal of this study is to estimate a complete, theoretically plausible system of household demand to investigate the impact of household characteristics on household consumption behavior in the province of Central Java, Indonesia. The extended model of the Almost Ideal Demand System is used for empirical estimation. It is hypothesized that households with different characteristics have different preferences and that these differences in preferences can be investigated by making household demand dependent not only on prices and income but also on household characteristics. It is also hypothesized that the study of household consumption behavior should use household data to satisfy the restrictions imposed on this theory. The data used in this study are from the urban households observed in the 1984, 1987, and 1990 National Household Socioeconomic Surveys in the province of Central Java, Indonesia;The results show that the joint effect of household size by age-sex composition, age and education level of the household head, education level of the spouse, housing status of the household, type of household, and main source of income are statistically significant in predicting the parameters of household consumption behavior in the province of Central Java, Indonesia. Individually, each type of household characteristic is found to affect significantly the parameter estimates of certain types of commodities consumed by the household. Compared with the estimated model of household demand that does not include household characteristics, the estimated parameters/elasticities of the AIDS model that includes household characteristics are significantly different. This study also found that the use of household budget data in household demand analysis satisfies the parameter restrictions required in consumer demand theory. These findings suggest that, to estimate the consumption behavior of the households, one needs to incorporate household characteristics and use household budget data.
Digital Repository @ Iowa State University, http://lib.dr.iastate.edu/
Ritonga, Hamonangan, "The impact of household characteristics on household consumption behavior: A demand system analysis on the consumption behavior of urban households in the province of Central Java, Indonesia " (1994). Retrospective Theses and Dissertations. 11312.