DO HIGHER INCOMES PAY MORE? The effect of price - income relations on the direct and indirect energy requirement of households in the Netherlands


Vringer, K., and Blok, K. (1997). Do higher incomes pay more? The effect of price-income relations on the direct and indirect energy requirement of households in the Netherlands. Report 97004, NW&S-UU, Utrecht, The Netherlands. ISBN: 90-73958-23-7

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Abstract

In a previous study a quite strong dependence of energy requirement on income was found. For most consumption categories it was not taken into account that the price per physical unit of product can increase with income. In this paper we explore the possible effect of this negligence.

For 82 consumption sub-categories we examined the price-income relation. For 37 of these categories no significant rise of price with income was found. The other categories generally showed an increase of the price per physical unit with income. In the previous study we found an elasticity of the energy requirement related to net household income of 0.63. Extrapolating the price-income relations found in this study to all consumption categories results in a decrease of this elasticity value to 0.56 to 0.60.


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