Habits and empirical analysis of demand for six aggregate commodity groups in Greece

Part of : Σπουδαί : journal of economics and business ; Vol.43, No.2, 1993, pages 139-154

In this paper using data form 1958 to 1989, the hypothesis of linear habit formation cannot be rejected, indicating that tastes have not been constant in Greece. Food exhibits inventory depletion effect; beverages and tobacco, footwear and clothing, settling and housing, and transportation and communication exhibit habit persistence. By accounting for habits, food becomes more sensitive to both prices and expenditure; while the opposite is true for settling and housing, and transportation and communication. On the other hand, beverages and tobacco, and clothing and footwear become more price responsive but less income sensitive when myopic formation is considered.
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Περιέχει παράρτημα πινάκων και βιβλιογραφία, We would like to thank the anonymous reviewers for helpful comments and suggestions and the Editorial Secretary for communication assistance.