EFFECTS OF FAMILY COMPOSITION ON HOUSEHOLD EXPENDITURE PATTERNS : THEORY AND EVIDENCE

Abstract

This exercise examines consumption expenditure of different countries, both developing and developed countries, including Singapore. For Singapore, both cross section and time series are used for the analysis. Chapter One introduces the key concepts related to household consumption patterns . The second chapter explains the theory behind the derivation of the Engel Curve. Chapter Three looks at empirical studies done in developing countries while studies on developed countries are summarized in Chapter Four. The fifth chapter presents the empirical findings of the Singapore case study. The concluding chapter discusses the shortcomings of the analyses and suggests some improvements that could be made. The major findings of the study are: (i) It is generally evident from the studies conducted in both developing and developed countries that an extra child into the household has a negative impact on adult goods.

(ii) In Singapore, as it is experiencing high income per capita, families with larger size prefer to have meals taken out;

(iii) There exists economies of scale for Fruits, Cooked food, Clothing, Footwear, Miscellaneous expenditure, Education, Alcoholic drinks and other expenditure in Singapore case; (iv) Adding a child or adult has a positive impact on expenditure on Rent & utilities, Medical services and Recreation & education and an negative impact on Clothing and Food & beverage in Singapore