Recent Developments in Applied Demand Analysis

1. Front Matter

   Pages i-xxvii

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2. The Economic Theory of the Consumer

   • K. W. Clements, S. Selvanathan, E. A. Selvanathan

   Pages 1-72

3. Empirical Regularities in Consumption Patterns

   • K. W. Clements, S. Selvanathan

   Pages 73-121

4. Data-Analytic Techniques for Consumer Economics

   • E. A. Selvanathan

   Pages 123-154

5. Hypothesis Testing in Demand Analysis

   • S. Selvanathan

   Pages 155-189

6. Undersized Samples and Demand Analysis

   • C. Dongling

   Pages 191-220

7. The Demand for Alcoholic Beverages

   • K. W. Clements, S. Selvanathan

   Pages 221-257

8. Advertising and Consumption: A Theoretical Analysis

   • E. A. Selvanathan

   Pages 259-295

9. The Effects of Advertising on Alcohol Consumption: An Empirical Analysis

   • E. A. Selvanathan

   Pages 297-340

10. Rotterdam Model in Forecasting: An Application to the Alcohol Market

    • E. A. Selvanathan

    Pages 341-358

11. Aggregation and Consumer Demand

    • E. A. Selvanathan

    Pages 359-390

12. Back Matter

    Pages 391-396

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The study of consumer demand is important for a number of reasons. First, as total consumption absorbs more than 70 percent of GDP in most countries, it is the largest of the macroeconomic aggregates, thus having great significance for the state of the economy as a whole and business conditions. Second, the pattern of consumption contains a wealth of useful information regarding economic welfare and living standards. Closely allied to this is that as consumption (both current and future) is the ultimate objective of all economic activity and economic systems (mercantilists notwithstanding), in a fundamental sense consumption patterns are an objective way of measuring and assessing economic performance. Finally, an understanding of the price-responsiveness of consumption is of crucial importance for a host of microeconomic policy issues including public-utility pricing, the measurement of distortions, optimal taxation and the treatment of externalities. The analysis of consumer demand is one of the major successes of economics as it represents the near perfect marriage of theory and econometrics, a situation almost unparalleled in any other field of economics. This field has attracted a lot of attention since the introduction of the linear expenditure system and its application to British data by Stone (1954), followed by the differential demand system of Barten (1964) and Theil (1965, 1975176, 1980) and developments thereafter.

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• School of International Business Relations, Griffith University, Nathan, Australia

  E. A. Selvanathan

• Economic Research Centre, Department of Economics, University of Western Australia, Nedlands, Australia

  Kenneth W. Clements

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