[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))

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)
Hosted by	:	Global Leader Program for Social Design and Management(GSDM),
		the University of Tokyo