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Title:Expenditure Behavior of Female-Headed and Two-Parent Families
Author(s):Horton, Sally Walker
Department / Program:Human Resources and Family Studies
Discipline:Human Resources and Family Studies
Degree Granting Institution:University of Illinois at Urbana-Champaign
Subject(s):Economics, General
Abstract:The objectives of this study are to examine how female-headed and two-parent families change their expenditure behavior with changes in income, to compare such changes, and to investigate reasons for any differences. Data are from the Bureau of Labor Statistics' 1972-73 Consumer Expenditure Survey. The two samples consist of 590 female-headed and 4881 two-parent families.
Total expenditures and expenditures on 13 consumption categories are modeled as functions of current income and six categories are modeled also as functions of permanent income using the double log form. Proxies included to hold constant tastes and preferences are family size, age and education of head, employment status of the woman, race, urbanization, and tenure. Current income elasticities are estimated by generalized least squares or Tobit analysis. Permanent income elasticities are estimated by instrumental variables.
No significant difference between the groups is found in current income elasticities of total expenditures. Only current income elasticities of expenditures on shelter, transportation, and health care are significantly different. Alcohol and tobacco expenditure is not significantly affected by income for female-headed families. Of the six permanent income elasticities estimated, only shelter is significantly different between the groups.
As income changes, both family types change their spending similarly except for shelter, transportation, and health care. Both change shelter spending less than proportionally to an income change, but female-headed families change less than two-parent families. Their spending on transportation and health care, unlike that of two-parent families, changes more than proportionally. As numbers of female-headed families grow, this may increasingly affect the economy.
The effects of the independent variables are measured by Engel function parameters using permanent income. Several of them have significant and differential effects on expenditures for the two family types. Many studies have used current income as the independent variable rather than permanent income. If one accepts the permanent income hypothesis, this implies a measurement error resulting in biased and inconsistent estimates of the parameters. Results of this study indicate that there are differences using the two methods and results of some previous studies should be interpreted with caution.
Issue Date:1983
Description:115 p.
Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1983.
Other Identifier(s):(UMI)AAI8409956
Date Available in IDEALS:2014-12-16
Date Deposited:1983

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