Modelling the consumption patterns in the Asian countries

This paper analyses the similarities in consumption patterns of consumers in ten Asian countries, utilising three well-known system-wide demand models, namely, Rotterdam, CBS and AIDS. Our estimation results reveal that the consumption basket is less diversified for consumers in poor countries than those in relatively rich countries in Asia. The demand elasticities indicate that, in general, for a typical ‘Asian’ consumer, food and housing are necessities, and clothing, durables and transport are luxuries. The demand for all goods is price inelastic. The test results on whether the Asian consumers are similar indicate more dissimilarities than similarities in their consumption patterns. The findings of this study will be important for policymakers in designing their economic plans; it will also be important for their counterparts in other countries to determine the market for their exports and for business organisations to implement their expansion targets.