Price and Income Elasticities Estimated from BLS Consumer Expenditure Surveys and ACCRA Price Data

Abstract

This paper represents a low-key effort to estimate both price and income elasticities for several broad categories of expenditure from cross-sectional data sets that combine price information collected by ACCRA with the BLS Consumer Expenditure Surveys. Sixteen quarters of data for 1996 through 1999 are analyzed. Statistically strong, and for the most part sensible, price elasticities are obtained for six exhaustive categories of expenditure (food consumed at home, housing, utilities, transportation, health care, and miscellaneous expenditures) from both simple double-logarithmic demand functions and equations based upon an Almost Ideal Demand System. The results are clearly supportive of further research.