Modelling UK household expenditure: economic versus noneconomic drivers

Mona Chitnis, Lester C. Hunt

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

This article attempts to quantify the contributions of economic and noneconomic factors that drive UK consumer expenditure for 12 COICOP categories of goods and services using the structural time series model (STSM) over the period 1964Q1 to 2006Q1. This approach allows for the relative quantification of the impact of noneconomic factors on UK household expenditure demand (via a stochastic trend and stochastic seasonal) in addition to the economic factors (income and price). The results suggest that the contribution of the noneconomic factors is generally higher for ‘housing, water, electricity, gas and other fuels’, ‘health’, ‘communication’ and ‘education’; hence, they have an important role to play in these sectors. The message for policymakers is therefore that, in addition to economic incentives such as taxes which might be needed if they wish to restrain future expenditure, other policies that attempt to influence lifestyles might also need to be considered.
Original languageEnglish
Pages (from-to)753-767
Number of pages15
JournalApplied Economics Letters
Volume18
Issue number8
Early online date21 Dec 2010
DOIs
Publication statusPublished - 2011

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Factors
Economics
Household expenditure
Modeling
Politicians
Economic factors
Income
Tax
Health communication
Gas
Consumer expenditure
Health education
Lifestyle
Economic incentives
Quantification
Electricity
Stochastic trend
Structural time series models
Expenditure
Water

Cite this

Modelling UK household expenditure : economic versus noneconomic drivers. / Chitnis, Mona; Hunt, Lester C.

In: Applied Economics Letters, Vol. 18, No. 8, 2011, p. 753-767.

Research output: Contribution to journalArticle

Chitnis, Mona ; Hunt, Lester C. / Modelling UK household expenditure : economic versus noneconomic drivers. In: Applied Economics Letters. 2011 ; Vol. 18, No. 8. pp. 753-767.
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