[Event Information]
GSDM 37th Platform Seminar
“Income-Induced Expenditure Switching”
26th Nov, 2014 10:30~12:10
(Hongo Campus,3rd Seminar room at Economics Research Annex (Kojima Hall))

2014/11/18
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This presentation shows that an income effect can drive expenditure switching between domestic and imported goods. We use a unique Latvian scanner-level dataset, covering the 2008-09 crisis, to document several empirical findings. First, expenditure switching accounted for one-third of the fall in imports, and took place within narrowly-defined product groups. Second, there was no corresponding within-group change in relative prices. Third, consumers substituted from expensive imports to cheaper domestic alternatives. These findings motivate us to estimate a model of non-homothetic consumer demand, which explains 80% of the observed expenditure switching. Estimated switching is driven by income, not relative prices.

Date : 26th Nov, 2014          10:30~12:10
Title : “Income-Induced Expenditure Switching”
Lecturer : Rudolfs Bems
(International Monetary Fund / Bank of Lativia / Stockholm School of Economics)
Venue : 3rd Seminar room at Economics Research Annex (Kojima Hall)MAP
Hosted by : Global Leader Program for Social Design and Management(GSDM),
the University of Tokyo