This paper aims to analyze the trends in the level and structure of consumer expenditures accompanying our economic development in connection with Engel's law. Economic growth affected both the propensity to consume and the shares of various subgroups...
This paper aims to analyze the trends in the level and structure of consumer expenditures accompanying our economic development in connection with Engel's law. Economic growth affected both the propensity to consume and the shares of various subgroups within total consumption.
In the recent years, the consumption expenditure has been amounted annually close to 90% of G. N. P.. Relationship between consumption (C) and disposable income (Y) as a linear might be founded for each of the data. Therefore, consumption function is as follows during the period of 1960 to 1970, in thousand of won : C=2.67=0.87Y. And that consumption expenditure elasticity coefficient of income is below I would lead us to expect some decline of the propensity to consume.
Summarizing changes in the structure of consumer expenditures by five broad categories, the share of food in total consumption outlays decreased from 62.1% in 1960 to 54.5% in 1971. By contrast, the share of miscellaneous expenditure in total consumption outlays increased from 13.8% to 21.6% during the same years. And several aspects of the urbanization process bear upon in the level and structure of consumer expenditure. Thus, in urban household, the share of housing in total consumption outlays increased relatively. But in the farm households, the share of miscellaneous expenditure in total consumption outlays increased more rapidly than that in urban households.
The trends in the level and structure of such consumption are affected by the complex interplay of changes not only in conditions of living in the course of economic growth, in social and economic groupings and their shares in income, but in the values of the basic pattern of life.