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Chapter II

REVIEW OF LITERATURE

Contents
2.1

Introduction

2.2

Conclusion and Research Gap
References

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REVIEW OF LITERATURE

2.1 Introduction
This chapter contains the review of various related studies on consumption.
Various developments in the studies on consumption and the determinants of
consumption pattern are surveyed. The review of various literatures explore the
avenues for future and present research effort related to the subject matter. The
review is done under International, National and Regional perspective for better
understanding.
Consumption pattern has been studied at different places all across the
globe and a remarkable change has been observed over a period of time. Both
developed and developing economies have exhibited significant changes in the
consumption behaviour. In the world a consumption transition is taking place in
which people shift towards more affluent types of consumption pattern. This
transition is taking place at different stages and form. In general whenever and
wherever economic growth occurs per capita shift in consumption shows the same
change of direction.
A study done in US economy by Rulon D Pope (2009) has shown a change
in the pattern of consumption. During the slowdown of the US economy in 2007,
some demands were recession resistant (e.g. beer) while others were very
procyclical (e.g., wine). The response of consumption to growth and business
cycles was done using quarterly National Income and Product Account (NIPA).
Various demographic and cultural factors and purchasing behaviours
influencing the consumption of some specific dairy products like fresh milk,
yogurt, ice cream and powdered milk in Beijing, Shanghai and Guangzhou, China
were studied by Frank et al (2007). Results of consumption pattern show that
income and marketing channels are the key determinants of milk consumption
levels; however, education, advertising and convenience play a more important
role in consumption of other dairy products. There is some evidence that milk
powder, as a consumer good, may be becoming an inferior product in urban China.

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The survey data suggested that the growing sophistication of China’s retail sector
is influencing consumption of other dairy products.
Market share analysis of six Latin American Countries of Argentina,
Brazil, Chile, Colombia, Costa Rica, and Mexico, were studied by Terry Roe and
Diao Shien (2004). which showed that retail market share commanded by
supermarkets has grown from a population weighted average of 10–20% in 1990 to
75% for Brazil, 50% for Chile, 38% for Colombia, 50% for Costa Rica, and 45%
for Mexico, which shows an average of 50–60% of food retail sales in 2000. By
2001, supermarkets in Argentina accounted for 57% of its share of total food retail
sales. As incomes grow there is change in household expenditure shares on food
purchased from modern versus traditional retail outlets.
Ivanova & Kajal Lahiri (2001) analysed the usefulness of Index Of
Consumer Sentiment ( ICS) in projecting aggregate consumer expenditure. Their
study reported strong linkages between consumer sentiments and consumption
expenditure in periods of overall uncertainty caused by conflicting socio economic
and political factors. At the same time, predictive power of sentiment was
relatively less when forward looking variables such as interest rate and stock prices
were included in linear and markov switching model.
Using an overlapping generation model, Sanjeev Sobhee (2001) studied the
impact of government spending and borrowing on private consumption. Based on
rational expectations, he estimated a consumption function of Mauritius for the
period 1973-76. It was found that government spending stimulated consumption
expenditure only in the short run. Similarly, consumers are also affected by short
run fluctuations in their disposable income.
Paolo Liberate (2003) has investigated the effect of reforming subsidies on
poor households by using data on consumer studies on rents and utilities, public
transport and health care in Belarus. His study identified that poverty reducing
policy in aggregate may have poverty–increasing effect for some population
groups and had negligible effects on poor households.

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Junji Kageyama (2003) has studied the effect on saving of a continuous
increase in lifetime. With cross country data it is found that an increase in life
expectancy has positive effect on various saving rates.
Obayelu AE et al (2009) used the food consumption data obtained from
house hold’s seven days memory recall to examine the differences in food
consumption patterns between the rural and urban households in the North-Central
Nigeria.. They found heterogeneity in consumption and expenditure patterns across
households in rural and urban areas. They also found that urban residents purchase
37.9% of the food they consume, families in rural areas purchase only 26.6%. The
most commonly consumed foods among urban populations included rice, fat and
oil, bread, soft drink, sugar and milk, while those in rural areas was substantially
different.
Mikkelsen et al (2000) examined whether fruit and vegetable consumption
in pregnancy is associated with birth weight in a Western population. Prospective
cohort study based on telephone interviews, a food frequency questionnaire (FFQ),
and extractions of birth characteristics from national health registries of 43,585
Danish women from the Danish National Birth Cohort who had completed the
FFQ in mid-pregnancy was conducted. Significant associations were found for all
exposures to fruit and vegetable intake with birth weight and most with z-score.
The strongest association was found for fruit intake in which case birth weight
increased by 10.7 gm (95% CI 7.3–14.2) per quintile. All associations were
stronger among lean women whose children’s birth weight increased by 14.6 gm
(95% CI 6.4–22.9) per quintile increase in fruit intake.
Sooryamoorthy (2006) opined that the transformation of consumption to
consumerism is not spontaneous but happens as a result of the combined effect of
several external and internal socioeconomic factors. Disposable income, a key
determinant not only in the spending power and decisions of the consumers but
also in the manifestations of consumerist tendencies, has been increasing in Israel
when its GDP registered a growth of 7 percent between 1975 and 1995, and the per
capita private consumption grew at an average of 4 percent between 1950 and
1996. On a par with the consumers in the western and industrialized countries, the

78 in the urban sector. It is found that the income elasticity for clothing in the rural sector was 0. On the basis of Lorenz ratio of size distribution of per capita expenditure. . Maiti (1993) used NSS data for the period 1953-54 to 1989 – 90 to examine the incidence of urban poverty. Wide rural urban disparities of per capita expenditure and urban inequalities were noticed. pubs and restaurants. Deaton (2000) using evidence from Central Statistical Organisation CSO. as the editors and contributors portray. Swai Boonma (1978) used data of Thailand’s socio economic survey of 1971-73 in which 5580 urban and 3168 rural households were surveyed .94 and 1.The double log linear formation were applied to estimate elasticity coefficient. Israelis consume commodities and images in shopping malls. Total expenditure is used as the proxy for true income. Total per capita expenditure is used as a proxy for income and Engel relations are estimated by using a variant of working –Leser model. It was also found that social progress has been uneven across different fields. focused that per capita expenditure grow more rapidly across relatively rich states than the poor one. affluence and demonstration to self. the inter temporal change in inequality in urban consumption expenditure has been analyzed. has promised to be a conveyance to normalcy.30 consumption basket of Israeli consumers is now overflowing with branded and luxury goods. Consumerism in Israel. National Account statistics and National Sampling Organisation(NSSO) examined poverty and inequality in India. The Sen Index and Head Count Ratio showed that the percentage of people below poverty line increased up to the mid 1960s and then declined sharply. inclusion. Hazell and Roell (1983) examined the expenditure pattern of Malaysia and Nigeria. It is found that there is a substantial increase in the average per capita expenditure in nominal terms for the poorest and the richest 20% of the urban population in the 1980’s as compared to the 1950s. By examining the indicators of living standards such as literacy and nutrition and health it was found that there is a significant increase in economic inequality.

25% of the population in both urban and rural areas in both rounds indicating that 1/5th of the population of India could not probably afford to eat as much cereals as they would like . Double logarithmic forms of function were adopted throughout the analysis. Mahalnobies (1963) studied the consumption of cereals. The quantity consumed however increased sharply in the bottom 20. fish etc.8th round during 1954-55 and 13th round during 1957-58. Using the fractile graphical analysis he has shown that in spite of large changes in price. meat.43% of total expenditure on all food items whereas in the city it was only 15.45% in the city. 39. cultivators. clerks. Singh pointed out the difference in resource allocation to the various consumption items to heterogeneity in socio-economic and cultural background. egg. Hay and Sinha (1972) analysed the food expenditure patterns of industrial workers in India and their families by using the data of various NSS rounds.99% in the rural area. The major occupational categories were professionals. The Indian Statistical Institute of Calcutta (1960) has prepared a report on the 15th round of NSS with regard to consumer expenditure.31 Making use of the two rounds of NSS. They found that the income elasticity of the demand for . Standard least squares. The per capita expenditure on cereals per month in the rural area was 41. Semi.59% . the quantity of cereals consumed remained remarkably steady over the two rounds.professionals. storekeepers.02% in the urban area and 43. whereas rural households spent more on inferior cereals and rice. Balvir Singh (1968) made use of the 15th round NSS data and examined the role of occupational factors on consumption pattern including the rural and urban sections of western U.The expenditure on non-food items as a percentage of total expenditure was 31. The survey found that in the rural sector people subsisted mainly on cereals and cereal substitutes while for the urban and city sector they were only the principal items of food.P. multiple regression technique with appropriate statistical tests were employed. Urban households expended more on vegetables. This shows a wide rural urban disparity in the level of living. skilled and semi skilled workers with one category for unemployed and unidentified workers.

32 food is subject to change in a particular manner and direction as development proceeds. The study revealed that the expenditure on cereals was about 50% of the total expenditure in lower expenditure classes which came down considerably for high expenditure classes. Devendra Gupta (1973) studied in detail the interregional variations in the consumption patterns in India. Ganguly (1960) compared the consumption patterns of five food items for the three occupational groups of Utter Pradesh. Tornqvist forms were observed to be somewhat superior to constant elasticity in many cases judging by the residual sum of squares. Proportion of expenditure devoted to milk showed an increase with the increase in expenditure levels. salt. With the help of graphs the Engel curve for the three occupational groups were compared. Several Engel forms were tested for appropriateness for rural and urban sectors separately. He analysed NSS data ( 7th round ) for 662 rural households. Covariance tests were used and it showed the existence of significant interregional variation in consumer behviour in India. The distribution of per person household monthly expenditure in rural and urban India was observed to be approximately of the log. Considerable differences in the consumption pattern of different occupational groups were found for almost all the commodities. The study was based on NSS 7th round data.normal type.3% in the urban area.4% in the rural area and about 1. His analysis was based on NSS data of 11th & 12th rounds. It is found that in all the regions the elasticities were less than unity for food grain and greater than unity for clothing. Bose (1960) studied the consumption pattern of cereals. milk and milk products using 4h 5th & 7th rounds of NSS data.4% and 2. The study was confined to food grains and clothing and the analysis was done for six regions of India. The expenditure elasticities of milk items were found to lie between 1. The urban elasticities in general were smaller than the rural ones especially for food grains and greater than unity for clothing. . Roy and Dhar (1960) conducted a study on the consumer expenditure pattern.

meat and fish. Finding the graphs to be sensibly linear. The sample size was 3326 households for urban and 1616 households for rural India. Rudra and Roy (1960) conducted a study with the support of NSS 4th and 7th rounds data about the factors determining the consumption of various commodities. It was found that the rural consumer having the same standard of living consume considerably more food grains than the urban consumers. the average expenditure on an item was plotted against the average overall expenditure for the particular group on double logarithmic paper. a straight line was fitted. 16th & 17th rounds of NSS data to examine the seasonality in consumption in rural and urban India. while demand for other three food items namely. In the lower expenditure levels. It was found that the rural consumers consume more of food items and less of non food items than their urban counterparts. Iyengar (1967) used the method of concentration curves for estimation of income elasticties. The expenditure elasticities were obtained instead of income elasticities in the absence of data on income. the larger percentage of total expenditure is spent on cereals in both the rural and urban sectors though the proportion was relatively higher in the rural sector. Double log form was used to estimate the quantity and value elasticites. The method is adopted by using only one explanatory variable. It is found that for every group of household. proportion of expenditure The on milk and milk products increased with increase in expenditure level. Data on household expenditure for the period 1955-1956 was obtained from NSS. Based on 16th round NSS data Chadda (1965) attempted to compare sectoral consumption pattern in Andhra Pradesh. Naha and Bhattacharya (1967) made use of the 15th. They found some variation between the average of total cost expenditure and the quantity and value of cereals. They found that seasonal patterns may be different in .33 Roy and Laha (1960) made a study on the relative increase in consumer demand in rural and Urban India on the basis of NSS 4th round data. milk and milk product and oilseeds was higher for urban consumers than rural consumer.

Their study was on the basis of 18th round of NSS data for rural areas. rice and wheat declined over time up to 2001 and again during 2003. linear. Three types of Engel curves namely. He also observed that changes in the consumption pattern varied from state to state. While for clothing. Ramesh Golait and N. A. milk and milk products were higher in the rural sector . weight being the percentage distribution of the population in each expenditure class. The study revealed that per capita consumption of cereals per 30 days in rural and urban areas declined over the years. fuel and light they were higher in the urban sector. semi log and double log Engel curve forms were used to estimate the expenditure elasticity for different commodity groups.C Pradhan (2006) using data on 43rd.34 different regions of India and that the family budget data would show more pronounced seasonality as far as small regions are considered. Giri (2006) studied the consumption pattern of cereals by using various rounds of NSS data covering the period 1987. It is found that the expenditure elasticities for food grains. It is found that the national average consumption of cereals. 57th rounds of NSS revealed that cereals consumption is generally much higher in the .monetised character of some of the economic transactions. Rate of non – monetisation was observed to be high for cereals and low for non food. They found that splitting up of total expenditure into monetised and non monetised components improves the estimation of expenditure on a specified commodity.log and double log were fitted for eight commodity groups. Singh and Singh (1971) studied 19th round of NSS data to examine the consumption pattern in Punjab. Linear.K.2004.04. Linear and double – log forms of Engel functions were fitted to obtain expenditure elasticities by using weighted regression analysis. The expenditure elasticities for all commodity groups was found to be higher in rural area than in urban. Murthy (1971) used the NSS data of 16th & 19th rounds and studied the pattern of consumer expenditure in Gujarat. Mukherji and Prasada Rao (1972) studied the effect of non. semi. 55th.

The double logarithmic form was fitted. mainly due to the higher consumption of rice by the rural households.35 rural areas than in the urban areas. tubers etc. the study was based on household data on total consumption expenditure. By using the 17th round NSS data. Jain and Sreenivasan(1967) made a study related to the economies of scale. There has been a shift in preferences towards non cereal items such as meat/ fish and fruits/ vegetables. In a study Sreenivasa Iyengar (1960) used the 4th and 5th round NSS ( 1952-53) and 13th round (1957-58) data from rural areas of west Bengal in which he tried to investigate the relationship of price movements and consumer behaviour using fractile graphical analysis. two other flexible models namely Nasse expenditure system. The results showed wide variation in marginal budget shares and demand elasticity across income groups. Murthy (2001) used the NSS data on consumer expenditure for five quinquennial rounds to estimate the three models in the context of India They are linear expenditure system. maize. The commodity groups were mainly food. clothing. Iyengar. a generalization of the linear expenditure system and ideal demand system. barley. A significant negative elasticity with respect to family size relating to milk and milk product was noticed in Utter Pradesh. The major findings of the study are significant changes in consumer tastes away from cereals and pluse in favour of other food items. housing and miscellaneous. rural and urban sectors. The household size and consumer taste and preferences are found to be statistically significant. and cereal substitutes such as tapioca. It was found that there was a decline in the consumption of all the cereal items over the period 1987-88 to 2001-2002 in both rural and urban areas with reduction being particularly sharp in the case of smaller cereal items viz. composition of commodities and household size obtained from cross-section of households in rural and urban regions of Uttar Pradesh and Madras. The fractile graphical analysis and the sub- samples showed that in real terms the distribution of expenditure on food and the distribution of total expenditure changed favourably in the rural areas of West .

The quality elasticity which may be taken as a measure of quality sensitiveness represents in relative terms. However in all methods. the ordering of commodities on the elasticity scale is found to be approximately the same. the amplitude and frequency fluctuations increase.. Iyengars method of concentration curves had been used along with the method of weighted least squares for finding Engel elasticity of items. . The major findings of the study are the proportion of total outlay spent on luxuries increases with the level of total expenditure and for necessities it decreases. Using the NSS data and analyzing the method of specific concentration curve and Lorenz curve Sreenivasa Iyengar (1963) studied the estimation of quality elasticities for certain commodities. but the long term tendency at constant prices for all expenditure classes is almost constant Saha (1980) using NSS data tried to estimate Engel elasticites for 101 items of consumption separately for rural and urban India. The degree of quality consciousness appears to be generally higher in urban areas than in rural areas. Iyengar and Jain (1964) made use of a non liner system of demand curves which were different from the add log model of Houthakkar (1960) in that it possessed the additional properties of homogeneity and symmetry. It is found that the consumers are generally tempted to pay higher prices for ostensibly similar items i. the increase in the average price paid by the consumer as a result of a unit rise in his total expenditure. Price elasticities of demand were all negative and for food the price elastics were lower in magnitude than for non-food in the years studied. The estimates seemed to vary slightly from one method to the other. Sen (1990) used the NSS data for the period 1950-51 to 1982-83 to analyze the trends in consumption expenditure in India. The method is illustrated from food and non food items from the published NSS data relating to monthly expenditures of rural households in West Bengal. to move for better qualities within the commodity groups as the standard of living improves.e.The level of expenditure improved and a decline in the inequality of the distribution are visible. It is observed that as we move to higher expenditure groups.36 Bengal during the five year period ie 1952-57.

88. 48 kg in 2003. et al (2007) with the help of the NSS consumption expenditure data from the 3 quinquennial rounds of 1987. In urban areas. NSSO data is used by Singh (2006) to highlight that the annual per capita consumption of cereals has been declining since the early 70s. the share of non cereals items has increased from 73. This may be due to shifting food consumption pattern from millets to cereals. milk. The average per capita cereal consumption in urban India fell from 136. It may be argued that the estimated negative income elasticity of rice is due to a shift in the Engel curve. In urban India.60 to in 2002. eggs.These estimates helped . 30 Kg/ annum in 1987-88 to 120. It is found that in the rural area in 1987-88 the percent of monthly expenditure on cereal was 40.90% in 2002. annual per capita cereal consumption has been declining. fish etc. i.01% in 1987-88 to 66.40% in 2002.25 Kg/ capita/ annum in 1987-88 to 150.al (2007) used various reports of NSSO and Basic Animal Husbandry statistics to estimate Compound Growth Rate (CGR) using an exponential growth model for production of various crops. meat. either due to increase in cereal prices or due to a change in preferences. This shows that rural people have started spending more money on expensive and nutritious food items such as milk and milk products. pulses. In the case of non-cereal items the share of expenditure is increased from 59. It is observed that the level of maximum cereal consumption had declined overtime in some states and at all India level. meat.e from jowar to rice. Between 1987-88 and 2003 the annual per capita cereal consumption in rural India declined from 175. Srikanta Chatterjee et.10% in 2002. fish etc.18/capita/annum in 2003. which declined to 33.46% in 1987-88 to 23. The smallest decline was found with rice consumption and the largest with Jowar.03. al (2006) estimated the expenditure elasticities of demand for selected items of food by using NSSO data .99 %. the share of expenditure on cereals is much less compared to rural areas and is decreasing. Verma et. 1993-94 and 992000 indicated that there had been a decline in rural deprivation between 1987-88 and 1999-2000 at the all India level. oilseeds. declining from 26. eggs.54% in 1987-88 to 76.37 Krishnakumar. People were substituting non cereal and non food items for cereals.

Agarwal (2008) based on various rounds of NSS report analysed the impact of rising food prices on Indian households. It was found that in both rural and urban areas. meat.5 kg in rural households. Based on the analysis of the consumption expenditure data collected from NSSO of 27th.4kg in urban and from 7kg to 9. fish and vegetables. Their behaviour is in consonance with . Turan (2001) in a paper presented in the International Conference of Forum for Interdisciplinary Mathematics focused the changes in consumption pattern of food across the income groups and states over the years. milk and milk products. animal products.2 kg in rural households. people have shifted their consumption from cereals to vegetables.4kg in urban areas and from 14.88 to 2001-02 they observed that per capita consumption of total cereals has continued to fall in both rural and urban households while that of edible oils.8 kg to 12.1kg to 9. At the same time per capita consumption of meats.9kg to 1. the household’s expenditure on food items has declined over the years.5 kg to 13. egg.5kg in rural households.5kg in urban areas and from 0. Over a period. Overall monthly consumption per capita of cereal has declined from 11. It is observed that people in the lower income groups spend majority of their incomes on food items and within food items on cereal consumption in both rural and urban areas. It is mainly being done at the cost of inferior food items. edible oil. vegetables and fruits has continued to increase in rural and urban regions. fish and egg rose from 2kg to 2. but richer people in urban areas consume less food items and cereals. meat etc. 43rd and 50th rounds it was observed that the consumption expenditure in cereals and cereal substitutes have decreased indicating thereby an overall improvement in income levels of the masses. Consumption of fruits and vegetables increased from 11. Indian ruralites have started spending more on pulses. Based on the 43rd and 57th rounds of NSS covering the period 1987.38 him to observe a shift from cereal to non cereal food items during the 1990’s when income / total expenditure increased. Kumar and Mathur (1996) found per capita consumption of all non staples higher in both rural and urban households in 1987 and in 2002 compared with 1977 and1988. milk items.

43. while in the rural sector. Their findings are that in urban areas the proportion spent on food fell from 63% in 1987-88 to 54% in 1999-2000. The . 1987-8. Correspondingly. 50. The study also showed that with increase in income. The average per capita expenditure in the urban sector was always found to be greater than its rural counterpart. both in the rural and urban regions. The major findings of the study are in conformity with Engel’s law.’ the studies on estimation and projection of consumer demand were analyzed by Shah(1975).1999-2000 to review past trends in per capita consumption of cereals and non cereals and to identify the factors that affect changes in cereal consumption. Shubhashis Gangopadhyay and Wilma Wadhwa (2004) in a report identifies some important estimates of how households behave. the proportion spent on food should be falling and those on miscellaneous items should be increasing. 55 pertaining to the periods 1983. They calculate the NSS estimates of total expenditure for each of the commodity groups and compare them with the (NAS) National Account Statistics report. ie. there has been a structural shift in consumption pattern away from cereals to high value agricultural commodities. In rural areas the drop was from 69 to 62%. people in general have started moving towards consumption of superior food items in rural as well as in urban areas. Chatterjee (1976) made a comparison of per capita consumer expenditure between rural and urban areas in his study on disparities in per capita household consumption in India.In the last two decades. In a research survey report titled ‘Consumption and Demand. If incomes are increasing over time. The major findings are the annual per capita consumption of food grains has declined between 1983 and 2000. 1993-4. Surabhi Mittal (2006) used the NSSO data of various rounds such as 38. the expenditure on miscellaneous rose from 18 to 25% in the urban sector. This is true in both urban and rural areas. between 1983 and 1999. it went up from 14 to 19%.39 Engel’s law. He classified the different expenditure classes of the 18th round (NSS) into 5 quintile group (20%) each and found that the per capita expenditure of each quintile group increased both for the rural and urban areas in each state.

Chaturvedi (1990) examined the consumption expenditure trend and the . In an econometric study based on Central Statistical Organisation data Gupta (1986) analyzed the aggregate consumption behaviour and trends in consumer expenditure in India.The estimated expenditure elasticities are found to be relatively low for food items while they are very high for non food . The study focused the trends in relative consumption levels and inequalities in different sectors of the economy for a period from 1961-62 to 197374. regression coefficients. City inequality might have widened relative to rural and non-city urban sector. It is found that there had been a declining trend in urban inequality compared to rural. expenditure elasticities and the percentage of expenditure on various items. Based on the data from various NSSO rounds Sandhu (1985) made a statistical comparison of consumption pattern of Punjab and Gujarat. inter regional and inter temporal variations in the consumption pattern during the period from 1966-67 to 73-74. In the study he examined the inter state. The source of heterogeneity in consumption pattern was observed in intercepts of the covariance model. It is found that MPC for food items which was higher in the early period showed a declining trend where as the MPC for non food items registered an increase thereby indicating a structural shift in consumption pattern since mid 60’s. Tamil Nadu. The study also made a comparison between Kerala. These variations are determined by differences in tastes and preferences. Punjab and Haryana on the basis of their per capita income differences between rural and urban sectors and their structural behaviour. Empirical findings were made by choosing the best fit Engel forms.40 study identified lack of adequate research in certain areas such as demand pattern for individual food item. Suryanarayanan (1986) attempted to analyse the trends in inter and intra sectoral distribution of income in the slow growing economy of India by using the NSS data. In a research study on consumption expenditure and inequality in rural India. The study used six forms of the Engel functions for the estimation of expenditure elasticity of broad groups of items. demand for non food item and the problem of poverty.

He found that the consumption expenditure has undergone structural changes during the period of 49 years . using the time-series information on the consumption expenditure on various goods and services. There is no significant inter sectional variation in the consumption pattern of pan. Amarjit Singh Sethi (2001) made an attempt to examine the nature and speed of structural transformation in India’s private final consumption expenditure along its growth. tobacco and intoxicants. It is shown that an understanding of consumption in social and cultural terms can be quite problematic for those seeking to make affluent consumption more sustainable. The study confirms the existence of significant intersectional variation in the consumption pattern of milk products. The rise of the sign value of consumer goods may be partly behind the extraordinary increase in material consumption levels by affluent consumers worldwide. total consumer expenditure for all three income groups namely low middle and high. clothing. Bijya Kumar Panda et al (2008) examines the intersectional variation in the consumption pattern based on the most suitable functional form of Engel curve separately for nine food items and five non.food items has risen .The speed of structural changes was much faster during the period 1970-1998 as compared to those during 1950-1970.Relative share of expenditure on food items has declined while that on non. This is mainly due to the impact of green revolution coupled with the liberation and globalization policies.food items of consumption using Dummy variable interaction model in Orissa (DVIM). . Anja Schefer and Andrew Crane (2005) discussed different conceptualizations of consumption and their implications for notions of sustainability. The study is based on the grouped cross section data of 55th round (1999-2000) collected by NSSO. There was a regular increase in per capita. durables which is due to significant difference in the MPC and the mean level of total expand item in rural sector and urban sector of Orissa.41 expenditure inequalities among three income groups in India. all food items. fish and egg. The study was based on NSS data over the period from 1952-1953 to 1986-1987.It is found that the distribution of demand between mass consumer goods and luxury goods has remained the same over time.

Increased importance in the consumption of non-food items such as refrigerators. Personal transport expenditure increased by 50% where as expenditure on rent and water charges decreased significantly. Madhu Nagla (2007) studied the effect of social and cultural variables on households’ food provision and consumption and enhance insights into the factors that determine family food consumption. A smaller percentage of budget shares was found devoted to food consumption and the consumption pattern has changed. 172/ in 1996. time consumption in cleaning. washing machines and washing materials also observed. Pendakur (2001) based on survey data examined the poverty rate as the proportion for individuals who have consumption rather than income lower than the absolute poverty line. which reflected changing life styles and improved standard of living. prepared meals.97 to Rs 10. but lower inequality has generally been associated with higher future consumption level. The major findings of the study are – At the households level consumption of food particularly leafy vegetables is excluded from the routine diet.02. Andrew (2000) examined the relationship between inequality and average household living standard by using annual time series data for Indian states. and milk preparations assumed greater importance. The data were collected among 75 rural and 75 urban households in Haryana state in 2002. It is observed that consumption was adjusted for differences in the prices faced by and demographic characteristics of different household. As with income poverty measures. It is found that the average monthly expenditure showed a rise of about 31% from Rs.42 Household budget Survey data report (2002) studied the expenditure pattern of Mauritius. Urban sectors of some states consumption is positively correlated with subsequent inequality. the consumption poverty rate increased by more than half between 1992 and 1998. gas. Causality tests are applied to examine the relationship between subsequent inequality and households’ consumption on the one hand and initial inequality and subsequent consumption on the other hand. It is also found that within the food items frozen products. 725/ in 2001. but it was found to have declined over the 1970s and 1980s. canned vegetables. It is because of taste. 8. electricity. .

Population is growing at over 1. occupation of husband etc.43 washing. As far as food consumption was concerned.91 to 412 gms in 2005-06 .25 years was selected. Food grain consumption of cereals has declined from a peak of 468 gms per capita per day in 1990. The major findings of the study are house wives contributed maximum . Kumar et al (2006) studied the food habits of teenagers and youth in relation to fast food consumption in Allahabad city of Utter Pradesh by selecting a sample of four restaurants by stratified sampling procedure. Nutritional status was found to be positively related with education of respondent. People are becoming occupied with their work and thus neglect eating together. urban women enjoyed a better position in all the food items. In the Urban area fast-food market is rapidly catching up as parents do not have sufficient time to cook. indicating a decline of 13% while consumption of pulses declined from 42 grms per capita per day ( 72 grms in 1956 – 57 ) to 33 gms during the same period . riboflavin. education of husband. It is concluded that increase in income of the poor would lead to greater increases in their nutrients intake as compared to the non-poor. A profound variation in the nutritional status was observed between the rural and urban women in Orissa. carotene and iron) using All India sample of rural households for 1994. chopping. thiamine. The study is based on national family Health Survey data which comprised of 4425 married women in the age group 15. Linu Mathew (2008) in his report observed that food scenario in India is becoming critical. and cooking which in turn make children anaemic. household standard of living.5% while productivity of food grains is lagging behind at meagre 1% which poses serious threat to food security in the long run. Jha et al (2009) computed nutrient – income elasticities for two macronutrients ( carbohydrates and proteins) and five micronutrients [Calcium. It is shown that in each case the respective elasticities are positive and significant. Rout (2009) examined the variation in food consumption and nutritional status of women in Orissa in rural and urban areas against different background variables.49. Within each selected restaurant a sample of minimum 30 fast food consumers aged 15.

clothing and tobacco significantly reduced from 1999-2000 to 2005-06. The decline in per capita consumption of cereals. pulses. milk and milk products and sugar and jaggery was lower than their respective recommended dietry intake in the daily diets of pre-school children. as well as through their selection of places to eat and foods to buy. other vegetables. green leafy vegetables. namely. Gier (2007) explored the relevant hypothesis with data from categories of 2 to 12 year old children in medically undeserved communities. Hiremath (2007) observed that the food consumption pattern in India is diversifying towards high value commodities. They examined fast food marketing as an influence on the fast food consumption of 2 to 12yearsold children.2%) fast food item and Pizza (22. . In the case of the poor. fruits. About 73. Parents influence children’s eating habits through the implicit and explicit modelling of food consumption behaviour.8%) came out to be the least preferred item. a deep fried Indian Snack. in particular coarse cereals has worsened the nutritional status of the rural poor. It is also found that the daily mean intake of all food stuffs. Parents influence children’s eating habits through the foods they purchase for and serve in the household. roots and tubers. A study undertaken by ASSOCHAM (2006) On “Emerging patterns of Private Final Consumption Expenditure (PFCE) reveals that domestic household expenditure of their total income on health. total consumption of high value cereals like rice has declined by 10% due to rise in prices of cereals in real terms during the 1990’s and dietary diversification towards non food grains.2 % of the respondents were occasional consumers of fast food.44 among fast food consumers. 15% and 25% respectively while spending on food. was the most preferred (99. cereals. transport and communication has substantially improved in last six years to touch 12%. fats and oils. Khetarpaul (2006) analysed the food consumption pattern of 183 Indian Preschool Children (4 to 5 years) in Fatehabad district of Haryana using a 24-hour recall method for 3 consecutive days. It is also found that Samosa. education. The rising income levels coupled with increased awareness have led to more spending by households on health care.

365. He noticed six major changes in the consumption pattern – the first is that. This reflects the improvement in the standard of living particularly among the middle class. fuel and power. 2nd. urbanization and changing prices of cereals and non cereal foods are causing some tectonic shifts in the food consumption pattern. while fat intake has risen for all income groups. too shows similar trends with expenditure in rural areas at 7% of the monthly consumption. Lastly.45 education. 12 per person per day on consumption. health. But even among lower-income groups. people are spending proportionately less on food items. compared to 6% for urban areas. The fifth interesting change noticed in the consumption pattern is that people are spending less on tobacco and related items and more on beverages.7%. the share of communications has gone up mainly due to greater use of private services including cellular phones in urban and rural areas. The survey revealed that nearly 19% of the rural population belonged to households with monthly per capita consumption expenditure less than Rs. 19/ Person/day). at 2005-06 prices. 22% of the population belonged to households with MPE less than Rs. Some changes in consumption patterns can also be . ie spending less than Rs. The diet of all income groups has moved from cereals to noncereal foods. The pace of decline of cereal consumption in the upper income group was faster than that of the lower income groups. Clothing which includes spending on bedding and foot wear. Singh (2008) in the survey using the latest data on household consumption expenditure points out that rural India is allocating almost 10% of the monthly household budget for fuel and lighting. Energy intake has increased for the poor and decreased for the rich. 3rd and 4th points high lighted increased spending on transportation. consumption of high value food increased in the past decade. Gulati (2004) viewed that rising incomes. In urban India.3% while GDP grew by 58. transport and communication. 580 (about Rs. while an average urban household spends 9% under the head. Sabnavis Madan (2006) who examined changes in the Composition of private final consumption expenditure by choosing the financial year 2000 to 2005 found that consumption grew by 49.

Bardhan (1967) in his studies on the pattern of income distribution in India and on the incidence of poverty in rural India in the 60’s analysed the pattern of income distribution and incidence of poverty in rural India. It is also noted that a shift has been taking place from cereals to other food items and services. Jammmu and Kashmir. and West Bengal during the period from 1960-61 to 1967-68. Chatterjee and Bhattacharya (1974) expressed their disagreement with the findings Dandaker and Rath made in their study on variation in consumer prices . As early as 1967 the National Council of Applied Economic Research (NCAER) conducted an All India Consumer Expenditure Survey to compare and contrast the pattern of consumer expenditure and income in developed and non developed countries. Gujarat.. saving and consumer expenditure with special reference to middle class in India held in 1972 revealed that -average household income rose with the level of education of the house hold and also 1/3 of the aggregate income of the household sector was from the middle class both in rural and urban sectors in almost the same proportion. M. The study reveals that there had been a very significant rise in the percentage of rural population below the minimum level of poverty in Assam. the disparities in living standards were examined among categories by principal occupation . Another household survey conducted by NCAER (1972) on income. There was a high degree of concentration of income in the middle classes in both the rural and urban area. A tendency to use more of wheat in the place of rice was also observed. Kerala.land ownership and by size of the household size of the different states and the whole of all India over the period 1958-59 to 1967-68. In Vaidyanathan’s (1974) study on inequalities in living standards in rural India.P. One of the findings of the survey is that the concentration of income and expenditure in the high income bracket is greater in the developed areas than in the non developed areas. A positive correlation between size of land holding and per capita consumption and a negative correlation between family size and per capita consumption are observed.46 attributed to increased female presence in the work force and the consequent higher spending on non home cooked food.

consumption expenditure. Projections to be built using Engel function analysis for broad group of commodities for which changes in the price structure do not seem to be important. Mahajan ( 1980) undertook an econometric study of consumer behaviour in India focused on two aspects of demand analysis namely the approximate estimation of indifference surfaces and the complete demand system with Engel curve analysis incorporating region. Ghataka (1985) in his study of consumer behavior in India quantifies and analyses the personal consumption expenditure of Indians during 1950. No correlation between the occupational holding and family size of households could be observed. As peasant family moves up in the income hierarchy.73. occupation and family size. They held that Rath et. He explains the regional . which were not used in their region. Chaudhary and Uma Datta Roy (1977) who made an enquiry on the pattern of distribution of income. consumption and household assets in rural areas found a decline in inequalities during the 60s. The study revealed that there exists no correlation between the consumption expenditure of households and the family size. its demand pattern and hence its consumption level undergoes a change.51 to 1972. They viewed that the indices of Kerala were made by substituting average prices in neighboring states for certain items. It is found that assumptions of interstate homogeneity and inter temporal stability of consumer behaviour in India are heroic. The thesis has been written with a view to analyse the existing theories of consumption and applicability to indicate the regional disparities of consumer expenditure for an under developed nation like India.al seemed to have exaggerated the relative price levels in rice and wheat consuming states and understated the relative levels of average per capita expenditure in real terms in these states.47 and per capita household consumption in India. The study also emphasized the need for a household income survey at regular intervals for estimating trends in income distribution. income and land holding among the peasantry in some villages in Tamil Nadu. Sivakumar (1976) made a study on family size.

Urban India has behaved differently across regions since disposable incomes and consumption pattern are driven by different segments. A sudden change in advertising affects the consumption pattern of the people and that an increase in advertising expenditure can have a positive impact on consumption irrespective of its lag. Hindu Business line (2007) points out that an increase in the education level and media exposure has led to significant changes in the consumption pattern of rural India. In rural India. where as it has decreased for cereals. Since 1972-73. the share of milk and milk products. fish. The urban consumption in the South is mostly led by techniques and the textile exports market. rising prosperity and extended media reach has led to the convergence of aspirations for branded goods across categories. meat. the share of food in total expenditure has fallen through out the three decades prior to 2004-05 and the overall fall was from 73% to 55%. Abey P Philp (2007) in an article tried to find out whether advertisement affect the consumption pattern in India. Gupta Saugata (2009) showed that the recent financial downturn and the subsequent recovery has indicated a diverse pattern of impact on consumption across various segments. The major findings of the study are that fluctuations in advertising expenditure have a positive impact on consumption expenditure. The analysis reveals that there is strong bidirectional relationship between advertising and consumption pattern in India. vegetables by 2. Joice John (2007) analysed the group level differences among the estimates and their contribution to the overall differences in consumption expenditure in . fruits and nuts has increased by 1%. In rural India. He used the annual long run time series data on consumption and advertising expenditure for the period 1980-06. egg. refreshments and processed food by 2% points.5%. In addition they are also smoking and drinking more than boys. beverages. thereby putting their long term health at risk.48 disparities of consumption / saving pattern among different income groups in urban /rural area of India. However. A new survey conducted by the Economist Magazine ( 2010) revealed that teenage girls are increasingly living on junk food.

fruits. Handling cost and marketing margins. Roger Mason (1981) says that conspicuous consumption is most evident in traditional societies on the occasion of wedding and funerals. which he called conspicuous consumption. The environment such as better mass communication networks and effective advertising industry and a wide range of products from day to day consumer goods to the most sophisticated commodities produced by the MNC's provide a conducive atmosphere to changing consumption pattern. Changes in income and price levels during the period could explain about half the fall in per capita consumption of cereals in the urban areas and about three fourth of the fall in rural areas. George (1986) analyzed the structural changes in the consumption pattern in India by quartile group of population for the period from 1964-65 to 1973-74. vegetables. Indian society as an example. transport and recreation showed many differences in expenditure. reserve their earnings for such ceremonies to the extent of cutting down the expenditure to their basic minimum needs. In a study of the changing pattern of consumer demand for food grains in India. Items such as food grains.49 various units in 1972-73 and 1977-78. varied reference period. fuel and light. all caste groups exhibit conspicuous consumption as a way to improve their social standing within the state. Modern illustration of this type of conspicuous consumption are not difficult to find. Its very essence is waste rather than utility. A generation ago Thorstein Veblen (1899) revealed in his inimitable style of operation of this force. sugar. The analysis revealed that per capita consumption of cereals declined both in rural and urban areas while there was an increase in the per capita consumption of wheat and bajra in all quartiles except the top. Major factors which lead to the divergence are different implicit prices of consumer goods. Most people are poor. . This May be defined as consuming of wealth and services on a grand scale for the purpose of demonstrating pecuniary power rather than to satisfy an organic or cultural want. differences in classification etc. composition and quality differences among cereals and the Public Distribution System influence the rural urban price differences in different ways.

Almost all children studied are influenced by advertisement in children’s TV programmes. The study concludes that 9 out of every l0 households indicate children influence their parent's purchase. The housewife too is an influencing person. Dissatisfaction was found to have a weak but positive relationship to consumer alienation. India and US. She puts forward the purchase of TV as an example. Sankar (1987) attempted to study the major problems of consumers which are growing in dimension and intensity in modern India. His study. decisions are collective rather than individual in the conclusion of Prasanna K. In the case of valuable durables. utilising a Chicago area was designed to investigate the problem. Marye Tharp Higler and Lee D. According to him scientific and technological development has bought perceptible changes in economic and .social life of the consumer. He points out that the remarkable progress in all fronts achieved under five year development plan has resulted higher income and more purchasing power and bulging demand of desire items of consumer goods and services of the rapidly growing population with consequent escalation of consumer problems. but market place alienation had no relationship to general alienation product. to contrast consumers attitude about the market place. Children can successfully use a variety of effective appeals to promote purchase. TV is bought mainly on the insistence of the children in the household. Sankar (1987). The sample constituted 370 children (age group 2-8) representing 221 households. though many parents insist upon improving the product. She points . They point out that consumer alienation is an externality of market development. Two countries were chosen. Income level of Indian respondents showed a weak relationship to consumer alienation. The Indian data reveals an overall higher level of consumer alienation. Parents in turn are influenced by their children. Dharingar (1982) has studied the effect of consumer alienation in market at varying stages of development.50 Mark Munn (1971) has studied the effect of parental buying habits of children exposed to children TV programmes.

it would appear that the remittance factor is central to an understanding of the performance of Kerala in recent times.2000. but mainly to emigrant remittances. Kannan and Hari (2000) analysed the changing consumption pattern in Kerala during the period 1972-73 to 1999-2000 and stated that Kerala is the state with the highest per capita income. fish. This boom is not fully associated with the domestic production and state income.51 out those personal contacts have played a vital role in the purchase decision of respondents. per capita state domestic product and modified state income through the estimation of average propensity to consume out of state domestic product and domestic income. They worked out the relationship between per capita consumption . Baiju (2004) attempted to analyze the consumption pattern in Kerala by using the quniquennial survey data on consumer expenditure of NSSO covering the period 1972. There is structural shift in the consumption budget from food to non-food items among all the income groups. It is found that a significant shift in the composition of food basket from cereals to non cereals like meat..2000. He used the expenditure method approach with total consumption as the explanatory variables. There is a boom in consumption especially among these groups. A person comes to know about the advantages of owning a particular product from his relatives. friends or co-workers and is thus induced to make enquiries about the product at the dealer outlets. egg. A study of Kerala model by Kannan and Vijaya Mohanan Pillai (2004) viewed that per capita consumption expenditure of Kerala was 35% below the national average until mid 1960s but during the past two decades it exceeded the . Given the fact that per capita consumption in Kerala since 1977-78 has consistently exceeded the national average without a corresponding increase in income. The average per capita consumer expenditure in Kerala was below the national average till 1977-78.73 to 1999. Since then per capita consumer expenditure in Kerala exceeded that of India progressively reaching 41per cent above the national average in 1999. The increase in per capita income as a result of remittances helped increase the consumption of the people in Kerala. milk and milk products and other food items has been observed both in rural and urban areas.

Relatively low level of nutritional status and the extent of social development achieved in Kerala remains a puzzle . the boom in per capita consumer expenditure was mainly due to the phenomenal increase in foreign remittances from gulf Keralites and the easy availability of credit facilities. 816. the per capita consumption expenditure was Rs.10 as against the national average of Rs. . In 1983. 591 at the all India level. Kerala has been experiencing an unprecedented consumption boom and increasing standard of living. In the case of Kerala. According to Madhavan (2000) a peep into the development history of Kerala brings out considerable differences in the consumption pattern and in the items in the consumption basket of the people compared to the other states. The value of consumer goods flowing into the state is estimated to be in the order of Rs5000 to 6000 croers/annum.. the problem became an artifact of peculiar diet pattern of households in a particular region.80 as against Rs.52 national average by 20%. if the lateral measurement was taken for measuring malnutrition. In her study about the consumer expenditure pattern of scheduled caste of Kerala Celinkutty (2003) found that the monthly per capita expenditure of scheduled caste households in rural areas of India and Kerala are much lower than that of the general households. coexist with substantial under nutrition. 152.4% of the country’s population. In his study it is found that Kerala has been an immense beneficiary of the annual remittances by the expatriates and these remittances continued to boost consumer expenditure.10 and in 1999-2000 it was Rs. Pat (2005) in his study ‘Black Spots’ in his socio economic analysis of Kerala gives a clear picture of higher per capita consumption expenditure in the state. According to them. The analysis pointed out that both the measurements of malnutrition namely nutritional intake and the anthropometric measurement respond very slowly to rapid increase in economic growth and that high rate of growth may in fact. Kerala accounts for 10%of the total consumption. With only 3. Same trend is discernible in the urban area also.This issue was examined by Kumar(1993) in his study on quality of life and nutritional status in Kerala. 125.

The social ambience of transforming consumption to consumerism are advertisement. The upper middle class and the low income groups are under the grip of demonstration effect and they are very much eager to widen their . Preference for consumer durables in the rural sector has been on the increase. The major finding is that there was a shift away from agricultural production to manufacturing and transportation among Indian states. In the case of Kerala. rural urban disparity has shown a definite tendency to decrease. According to Maithily (2008) demonstration effect has profound influence in the people of Kerala. Kerala recorded the average highest rate of increase in per capita consumer expenditure. The inner feeling of necessity of consumer durables is the major source of inspiration to purchase them. (1967-68 to 1985-86). ostentation. exposure to things and ways of living.The study underlines that consumerism became pervasive among all income groups where the propensity to consume and the changing preferences are in favour of non food commodity. Status consideration is a pressure factor that induces people to purchase consumer durables. Upper income class and rural consumer durable owners are more alert to make use of these discounts. credit purchasing facility. The study used NSS consumer expenditure data for the period from 1973-74 to1986-87. Sumedan (2009) found that special offers exert pressure on consumers to purchase consumer durables. By conducting a study on interstate and intrastate variations in economic development and standard of living Chaudhary (1992) analysed interstate per capita disparities and per capita consumer expenditure over a period of 20 years. Suryamoorthy (1997) in a study entitled Consumption to Consumerism in the context of Kerala looked into the sociological aspects of consumption and consumerism in the back drop of poor economic growth and high standard of living in Kerala.53 Majority of them belongs to low income groups and their standard of living is far below expectation. proximity to market. emulation of consumer etc.

According to him consumption pattern in rural Kerala closely followed that of urban Kerala. consumerism is motivated by status aspirations of consumers. while that nonfood items has decreased. However. For the middle income groups. According to him the power of consumerism is rather incredible and Kerala has earned one more first to its many unique features. A study about the pattern of household consumption in Kerala showed that foreign remittance has a significant role on consumption. Consumerism is deep rooted in Kerala and has its own repercussions in it. Sooryamoorthy (1996) in his working paper on emergence of consumerism in Kerala gives more details about the recent consumption pattern in Kerala. If the product is conspicuous. He also mentions that disparity of consumption has thrown up various social and political problems. Mahesh (1994) is of the view that increase of consumption expenditure is one of the effects of large remittance from Non Resident Keralites (NRKS) . He points out that with every increase in income.54 material pleasure at any cost. some unique explanatory variables that are responsible for the unique characteristics of consumption behavior in Kerala can be identified such as the inflow of foreign remittance to the state and commercialization of agriculture since the second half of 1970s.Simultaneously the taste and preferences of the people has also undergone a change due to population mobility and the impact of advertising media. the proportion of expenditure on food items in both rural and urban areas decreased correspondingly. Sunny (1994) in his article traced changes in consumption pattern in Kerala. His study of 320 sample households in Trivandrum district reveals that apart from congenial external factors in the consumption pattern. consumption of durables is a means to social mobility. its consumption would seem to be susceptible to personal influence. Maartinea Pierre (1958) found that social classes are powerful in the transmission of culture. This social class is often more important than income in influencing the purchase. Their lower income counter parts emulate them so as to enhance their social status. .

It is found that the NSDP recorded a growth rate of 8. 42.28 .It revealed that the consumption pattern of Kerala differed significantly and the proportion of expenditure on food declined while that of nonfood increased. Krishnan Pillai (1986) has attempted to estimate different macro economic aggregates of the economy in which he used reports of NSS for the period 1960-61 to 1973-74 . The aggregate consumption expenditure in the economy which formed 91. Kerala recorded the highest per capita expenditure in urban areas in contrast to the national expenditure.55 By analyzing five rounds namely. frequency of purchase etc. 2. mode of purchase. .99% over the period. 1989-90. edible oils other food and nonfood items.and 45 corresponding to the years 1973-74. Some of these studies are mostly based on NSS data and concentrated on broad commodity groups like cereals. K P Sunny (1988) in a study of consumption behavior of Kerala using the NSS data pertaining to the period from 1965-66 to 1982-83.97% of the NSDP in 1975-76 showed a compounded growth rate of 6. economic category. No attempt has been made to study the changing consumption pattern in Kerala based on region. pulses.1977-78. . Filling the research gap is very significant in the context of Kerala as this state has a unique consumption pattern in the country. place of purchase. 1986-87.06% which is less than the growth rate of NSDP. It also revealed that income elasticities of commodities remained almost same for both rural and urban areas of Kerala.By the end of the decade it rose above the national level.32. 38. Sooryamoorthy (2007) found that aggregate expenditure per person in the rural areas of Kerala remained lower than that of the all India level in the beginning of the 1970s .2 Conclusion and Research Gap Numerous studies on consumption pattern have been undertaken in India.1983.

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