A test of Leser's model of household consumption expenditure in the Philippines
Date
1999-03
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Abstract
This paper tests Leser's Model of Household Consumption Expenditure to
Philippine household data for the years 1991 and 1994. The ModelĀ· consists of two equations or models: one employs consumption expenditure as the only variable while the other uses household size as an additional variable.
Of the two models, the one incorporating household size IS better in
determining the more accurate budget shares of consumption expenditure items of Philippine households. Expenditure and household size elasticities are also computed. These tell us by how much consumption of each item changes when either expenditure or household size is changed, or when both are changed. In some areas of the Philippines, items which are considered necessities, and therefore should be easily accessible to Filipinos, are found to be luxuries. This means that important needs of Filipinos are not adequately met or provided. The proper government authorities should be cognizant of this. Many more important insights are gleaned from the empirical results of the application of Leser's Model, as learned from this study.
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Keywords
Consumption expenditure, Leser's Model