Documentation
Scope
This data set contains estimates of total and marginal budget
shares and income and price elasticities for nine broad consumption
groups and eight food subgroups across 144 countries. Total and
marginal budget shares and income and price elasticities are
estimated using 2005 International Comparison Program (ICP) data,
which is maintained by the ICP Development Data Group of the World
Bank. Countries are listed by per capita income which is reported
in the marginal share files. Similar estimates based on 1996 ICP
data, which also includes cross-price elasticities are available in
a zip file.
Product Coverage
Broad consumption categories
- Food, which includes food prepared and consumed at home, food
away from home, and beverages and tobacco
- Clothing and footwear
- Education
- Housing
- House furnishings and operations
- Medical care
- Transportation and communications
- Recreation
- Other expenditures
Food subcategories
- Bread and cereals
- Meat
- Fish
- Dairy products
- Fruits and vegetables
- Oils and fats
- Beverages and tobacco
- Other food products
Country Coverage
For the 2005 ICP data round, participant countries are divided
into six regions: five geographic regions-Africa (48 countries
included), Asia Pacific (23 countries), West Asia (11 countries),
South America (10 countries), and the CIS (10 countries)-and the
OECD and other European countries, plus Israel and Russia (46
countries). Egypt appears in both the African and the West Asian
regions, and Russia appears in both the OECD/Europe and CIS
regions. See International Evidence on Food Consumption
Patterns: An Update Using 2005 International Comparison Program
Data for the
complete list of countries.
Estimation Procedure
The analysis uses a two-stage demand system. In the first stage,
consumers are assumed to make budget choices over broad consumption
groups. Given the budget endowment for each broad consumption
group, in the second stage consumers make budget choices for
consumption items within each group. In using this approach, we
maintain preference independence within the broad groups. In the
second stage, weak separability among items within a broad group is
assumed.
The Florida model, a modified Working's model that incorporates
price terms, is fit to the first-stage model for nine broad groups
of goods across 144 countries. Although ICP data cover 146
countries, Greece was not available at the basic heading level and
Comoros was excluded from the analysis due to data concerns. This
model assumes preference independence. A modified version of the
Florida model, the Florida Slutsky model, which assumes weak
separability, is fit to the eight food subgroups. The country data
exhibit group heteroskedasticity. A maximum likelihood procedure
that corrects for group heteroskedasticity is developed and used to
estimate the model. Outliers are identified with information
inaccuracy measures, and Strobel measures of goodness-of-fit are
calculated.
The parameters estimated in the first stage of the analysis are
used to calculate elasticities for the broad consumption groups,
and the parameters estimated in the second stage are used to
calculate the conditional elasticities for the food subgroups. The
unconditional elasticities for the food subgroups are then
calculated using the conditional elasticities and the elasticities
for food estimated in the first stage of the estimation
process.
For additional information and references, see International Evidence
on Food Consumption Patterns, Cross-Price
Elasticities of Demand Across 114 Countries, and International Evidence
on Food Consumption Patterns: An Update Using 2005 International
Comparison Program Data.
International Comparison Program
The ICP was initiated in 1975 by researchers at the University
of Pennsylvania and is maintained by the ICP Development Data Group
of the World Bank. Over the years, data collected by the ICP have
increased from 10 countries in Phase I (1970) to 146 countries in
2005. ERS estimates are based on the latest ICP data (2005). The
146 economies covered by the data account for more than 95 percent
of the world's population and 98 percent of the world's nominal
GDP. Most of the countries included for the first time in this
round are low-income countries in Africa. The number of African
countries included more than doubled from 22 in 1996 to 48 in 2005.
Several Asian countries were newly included, most notably China and
India. In South America, Colombia was added and 12 Caribbean
countries were excluded. The Commonwealth of Independent States
(CIS) no longer covers Turkmenistan and Uzbekistan, so these
countries were dropped from the 2005 data set. In West Asia, Iraq
and Kuwait were added, and in the OECD/Europe and other countries
group, Cyprus, Malta, Croatia, Bosnia and Herzegovina, Montenegro,
and Serbia were included for the first time.
In earlier rounds, one product list was used for all countries
covered, and prices for these products needed to be collected.
However, consumption varies sufficiently across regions, making
such a common product list impractical. For the 2005 round, each of
the regions developed its own product list and determined its
purchasing power parity and volume shares independently. Later, the
regional results were linked to a global world comparison model
that left the regional relative parities intact.
Data Items
Budget share: measures the share of total
income spent on a product category.
Marginal share: measures the share of a $1
increase in income spent on a product category.
Income elasticity: measures the percentage
change in real spending on a product category given a 1% change in
income.
Own-price elasticity: measures the percentage
change in real spending on a product category given a 1% change in
the price of that category.
Source Reports
Additional References
Seale, James L., and Anita Regmi. 2006. "Modeling International
Consumption Patterns," Review of Income and Wealth, Vol. 52(4), pp.
603-24.
Theil, H., C.F. Chung, and J.L. Seale, Jr. 1989. International
Evidence on Consumption Patterns. Greenwich, CT: JAI Press,
Inc.
Working, H. 1943. "Statistical Laws of Family Expenditure,"
Journal of the American Statistical Association, Vol. 38, pp.
43-56.
World Bank, 2008. "Global Purchasing Power Parities and Real
Expenditures, 2005 International Comparison Program." Washington,
DC.