Marginal Propensity of Consume in China, India, Chile, South Africa

Only available on StudyMode
  • Download(s) : 708
  • Published : July 17, 2011
Open Document
Text Preview
MARGINAL PROPENSITY TO CONSUME

DATA INDIA

Household 1950-51 TO 1962-63

Rural C,=-425.7302+0.9291Yt+0.2631P, 0.9999 1.1108
Urban C, = 674.9379 4- 0.3345 Yt f+0.8585 P, 0.7847 1.6456
(0.2223) (1.3951)
Overall C, = -513.7060 + 0.7238 Y + 0.7543 P, 0.9945 1.0174

DATA CHINA
The marginal propensity to consume of Chinese households has been in a downward trend. Urban residents’ marginal propensity to consume fell from 0.85 in 2002 to 0.56 in 2008, while rural residents’ marginal propensity to consume dropped from 0.85 in 2002 to 0.71 in 2008. Rural residents’ marginal propensity to consume is higher than urban residents, while low-income groups’ marginal propensity to consume is higher than high-income groups in both urban and rural areas.

DATA CHILE
C= - 326,665 + 0.78GDP; R2 = 0.92

DATA SINGAPORE
The implied marginal propensity to consume with respect to wealth is even smaller, at merely 3 cents per $100 of wealth

DATA UNITED STATES
MPC is 90%, then for every extra dollar you earn (or are given) as an average American, you are likely to spend 90 cents of it as disposable income.

DATA NIGERIA

DATA SOUTH AFRICA
Best micro level data in SA for incomes and expenditures comes from StatsSA income and expenditure surveys (ies 95, 00 and 05)

APC in selected economies (real consumption/GDP ratio)
19601970198019902000
Singapore 0.80 0.61 0.52 0.46 0.41
US 0.68 0.69 0.66 0.68 0.68
UK 0.73 0.69 0.72 0.75 0.77
Japan 0.60 0.53 0.61 0.58 0.61
Taiwan 0.64 0.62 0.57 0.61 0.60
Hong Kong 0.69 0.65 0.64 0.65 0.64
Switzerland 0.57 0.55 0.60 0.57 0.58
tracking img