Chapter II

REVIEW OF LITERATURE

Contents
2.1

Introduction

2.2

Conclusion and Research Gap

References

27

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.

28

The survey data suggested that the growing sophistication of Chinas 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 1020% 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 5060% 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 povertyincreasing effect for some population
groups and had negligible effects on poor households.

29

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 holds 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 7.314.2) per quintile. All associations were
stronger among lean women whose childrens birth weight increased by 14.6 gm
(95% CI 6.422.9) 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

30

consumption basket of Israeli consumers is now overflowing with branded and

luxury goods. Israelis consume commodities and images in shopping malls, pubs
and restaurants. Consumerism in Israel, as the editors and contributors portray, has
promised to be a conveyance to normalcy, inclusion, affluence and demonstration
to self.
Swai Boonma (1978) used data of Thailands socio economic survey of
1971-73 in which 5580 urban and 3168 rural households were surveyed .The
double log linear formation were applied to estimate elasticity coefficient. Total
expenditure is used as the proxy for true income. It is found that the income
elasticity for clothing in the rural sector was 0.94 and 1.78 in the urban sector.
Hazell and Roell (1983) examined the expenditure pattern of Malaysia and
Nigeria. Total per capita expenditure is used as a proxy for income and Engel
relations are estimated by using a variant of working Leser model.
Deaton (2000) using evidence from Central Statistical Organisation CSO,
National Account statistics and National Sampling Organisation(NSSO) examined
poverty and inequality in India, focused that per capita expenditure grow more
rapidly across relatively rich states than the poor one. Wide rural urban disparities
of per capita expenditure and urban inequalities were noticed. It was also found
that social progress has been uneven across different fields. 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.
Maiti (1993) used NSS data for the period 1953-54 to 1989 90 to examine
the incidence of urban poverty. On the basis of Lorenz ratio of size distribution of
per capita expenditure, the inter temporal change in inequality in urban
consumption expenditure has been analyzed. 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 1980s as compared to the 1950s.
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.

31

Making use of the two rounds of NSS,8th round during 1954-55 and 13th
round during 1957-58, Mahalnobies (1963) studied the consumption of cereals.
Using the fractile graphical analysis he has shown that in spite of large changes in
price, the quantity of cereals consumed remained remarkably steady over the two
rounds. The quantity consumed however increased sharply in the bottom 20- 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 .
The Indian Statistical Institute of Calcutta (1960) has prepared a report on
the 15th round of NSS with regard to consumer expenditure. 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. The per
capita expenditure on cereals per month in the rural area was 41.43% of total
expenditure on all food items whereas in the city it was only 15.59% .The
expenditure on non-food items as a percentage of total expenditure was 31.99% in
the rural area, 39.02% in the urban area and 43.45% in the city. This shows a wide
rural urban disparity in the level of living.
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.P. The major occupational categories were professionals.
Semi- professionals, clerks, storekeepers, cultivators, skilled and semi skilled
workers with one category for unemployed and unidentified workers. Singh
pointed out the difference in resource allocation to the various consumption items
to heterogeneity in socio-economic and cultural background. Urban households
expended more on vegetables, meat, egg, fish etc. whereas rural households spent
more on inferior cereals and rice.
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.
Standard least squares, multiple regression technique with appropriate statistical
tests were employed. Double logarithmic forms of function were adopted
throughout the analysis. They found that the income elasticity of the demand for

32

food is subject to change in a particular manner and direction as development

proceeds.
Devendra Gupta (1973) studied in detail the interregional variations in the
consumption patterns in India. The study was confined to food grains and clothing
and the analysis was done for six regions of India. His analysis was based on NSS
data of 11th & 12th rounds. Several Engel forms were tested for appropriateness
for rural and urban sectors separately. Covariance tests were used and it showed
the existence of significant interregional variation in consumer behviour in India.
It is found that in all the regions the elasticities were less than unity for food grain
and greater than unity for clothing. The urban elasticities in general were smaller
than the rural ones especially for food grains and greater than unity for clothing.
Bose (1960) studied the consumption pattern of cereals, salt, milk and milk
products using 4h 5th & 7th rounds of NSS data. 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.
The expenditure elasticities of milk items were found to lie between 1.4% and
2.4% in the rural area and about 1.3% in the urban area. Proportion of expenditure
devoted to milk showed an increase with the increase in expenditure levels.
Ganguly (1960) compared the consumption patterns of five food items for
the three occupational groups of Utter Pradesh. He analysed NSS data ( 7th round )
for 662 rural households. With the help of graphs the Engel curve for the three
occupational groups were compared. Considerable differences in the consumption
pattern of different occupational groups were found for almost all the commodities.
Roy and Dhar (1960) conducted a study on the consumer expenditure
pattern. The distribution of per person household monthly expenditure in rural and
urban India was observed to be approximately of the log- normal type. Tornqvist
forms were observed to be somewhat superior to constant elasticity in many cases
judging by the residual sum of squares. The study was based on NSS 7th round
data.

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. It is found that
for every group of household, the average expenditure on an item was plotted
against the average overall expenditure for the particular group on double
logarithmic paper. Finding the graphs to be sensibly linear, a straight line was
fitted.
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. Double log form was used to estimate the quantity and value
elasticites. It was found that the rural consumers consume more of food items and
less of non food items than their urban counterparts, while demand for other three
food items namely, meat and fish, milk and milk product and oilseeds was higher
for urban consumers than rural consumer.
Based on 16th round NSS data Chadda (1965) attempted to compare
sectoral consumption pattern in Andhra Pradesh. It was found that the rural
consumer having the same standard of living consume considerably more food
grains than the urban consumers. In the lower expenditure levels, 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.
proportion of expenditure

The

on milk and milk products increased with increase in

expenditure level.
Iyengar (1967) used the method of concentration curves for estimation of
income elasticties. The sample size was 3326 households for urban and 1616
households for rural India. The expenditure elasticities were obtained instead of
income elasticities in the absence of data on income. The method is adopted by
using only one explanatory variable. Data on household expenditure for the period
1955-1956 was obtained from NSS.
Naha and Bhattacharya (1967) made use of the 15th, 16th & 17th rounds of
NSS data to examine the seasonality in consumption in rural and urban India. 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

34

different regions of India and that the family budget data would show more
pronounced seasonality as far as small regions are considered.
Murthy (1971) used the NSS data of 16th & 19th rounds and studied the
pattern of consumer expenditure in Gujarat. Three types of Engel curves namely,
linear, semi- log and double log were fitted for eight commodity groups. It is found
that the expenditure elasticities for food grains, milk and milk products were higher
in the rural sector . While for clothing, fuel and light they were higher in the urban
sector.
Singh and Singh (1971) studied 19th round of NSS data to examine the
consumption pattern in Punjab. Linear, semi log and double log Engel curve forms
were used to estimate the expenditure elasticity for different commodity groups.
The expenditure elasticities for all commodity groups was found to be higher in
rural area than in urban.
Mukherji and Prasada Rao (1972) studied the effect of non- monetised
character of some of the economic transactions. Their study was on the basis of
18th round of NSS data for rural areas. Linear and double log forms of Engel
functions were fitted to obtain expenditure elasticities by using weighted
regression analysis, weight being the percentage distribution of the population in
each expenditure class. They found that splitting up of total expenditure into
monetised and non monetised components improves the estimation of expenditure
on a specified commodity. Rate of non monetisation was observed to be high for
cereals and low for non food.
A.K. Giri (2006) studied the consumption pattern of cereals by using
various rounds of NSS data covering the period 1987- 2004. The study revealed
that per capita consumption of cereals per 30 days in rural and urban areas declined
over the years. It is found that the national average consumption of cereals, rice
and wheat declined over time up to 2001 and again during 2003- 04. He also
observed that changes in the consumption pattern varied from state to state.
Ramesh Golait and N.C Pradhan (2006) using data on 43rd, 55th, 57th
rounds of NSS revealed that cereals consumption is generally much higher in the

35

rural areas than in the urban areas, mainly due to the higher consumption of rice by
the rural households. 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,
barley, maize, and cereal substitutes such as tapioca, tubers etc. There has been a
shift in preferences towards non cereal items such as meat/ fish and fruits/
vegetables.
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, two other flexible models namely Nasse expenditure
system, a generalization of the linear expenditure system and ideal demand system.
The major findings of the study are significant changes in consumer tastes away
from cereals and pluse in favour of other food items. The household size and
consumer taste and preferences are found to be statistically significant. The results
showed wide variation in marginal budget shares and demand elasticity across
income groups, rural and urban sectors.
Iyengar, Jain and Sreenivasan(1967) made a study related to the economies
of scale. By using the 17th round NSS data, the study was based on household data
on total consumption expenditure, composition of commodities and household size
obtained from cross-section of households in rural and urban regions of Uttar
Pradesh and Madras. The double logarithmic form was fitted. The commodity
groups were mainly food, clothing, housing and miscellaneous. A significant
negative elasticity with respect to family size relating to milk and milk product was
noticed in Utter Pradesh.
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.

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

36

Bengal during the five year period ie 1952-57.The level of expenditure improved
and a decline in the inequality of the distribution are visible.
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. The quality elasticity which may be taken as a
measure of quality sensitiveness represents in relative terms, the increase in the
average price paid by the consumer as a result of a unit rise in his total expenditure.
It is found that the consumers are generally tempted to pay higher prices for
ostensibly similar items i.e., to move for better qualities within the commodity
groups as the standard of living improves. 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. 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. 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. 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.
Sen (1990) used the NSS data for the period 1950-51 to 1982-83 to
analyze the trends in consumption expenditure in India. It is observed that as we
move to higher expenditure groups, the amplitude and frequency fluctuations
increase, 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. Iyengars method of
concentration curves had been used along with the method of weighted least
squares for finding Engel elasticity of items. The estimates seemed to vary slightly
from one method to the other. However in all methods, the ordering of
commodities on the elasticity scale is found to be approximately the same.

37

Krishnakumar, et al (2007) with the help of the NSS consumption

expenditure data from the 3 quinquennial rounds of 1987- 88, 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. It is observed that the level of maximum
cereal consumption had declined overtime in some states and at all India level.
People were substituting non cereal and non food items for cereals, either due to
increase in cereal prices or due to a change in preferences. It may be argued that
the estimated negative income elasticity of rice is due to a shift in the Engel curve.
Verma et.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, pulses, oilseeds, milk,
meat, eggs, fish etc. It is found that in the rural area in 1987-88 the percent of
monthly expenditure on cereal was 40.99 %, which declined to 33.10% in 2002. In
the case of non-cereal items the share of expenditure is increased from 59.01% in
1987-88 to 66.90% in 2002. This shows that rural people have started spending
more money on expensive and nutritious food items such as milk and milk
products, eggs, meat, fish etc. In urban areas, the share of expenditure on cereals is
much less compared to rural areas and is decreasing; declining from 26.46% in
1987-88 to 23.40% in 2002- 03, the share of non cereals items has increased from
73.54% in 1987-88 to 76.60 to in 2002.
NSSO data is used by Singh (2006) to highlight that the annual per capita
consumption of cereals has been declining since the early 70s. Between 1987-88
and 2003 the annual per capita cereal consumption in rural India declined from
175.25 Kg/ capita/ annum in 1987-88 to 150.18/capita/annum in

2003. The

smallest decline was found with rice consumption and the largest with Jowar. This
may be due to shifting food consumption pattern from millets to cereals, i.e from
jowar to rice. In urban India, annual per capita cereal consumption has been
declining. The average per capita cereal consumption in urban India fell from 136.
30 Kg/ annum in 1987-88 to 120. 48 kg in 2003.
Srikanta Chatterjee et. al (2006) estimated the expenditure elasticities of
demand for selected items of food by using NSSO data .These estimates helped

38

him to observe a shift from cereal to non cereal food items during the 1990s when
income / total expenditure increased. Based on the 43rd and 57th rounds of NSS
covering the period

1987- 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, animal products, vegetables and fruits has
continued to increase in rural and urban regions.
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.

Overall monthly consumption per capita of cereal has declined

from 11.1kg to 9.4kg in urban areas and from 14.8 kg to 12.2 kg in rural
households. At the same time per capita consumption of meats, fish and egg rose
from 2kg to 2.5kg in urban areas and from 0.9kg to 1.5 kg in rural households.
Consumption of fruits and vegetables increased from 11.5 kg to 13.4kg in urban
and from 7kg to 9.5kg in rural households.
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, the households expenditure on food items has declined over the
years. Over a period, people have shifted their consumption from cereals to
vegetables, milk items, meat etc. 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, but richer people in urban areas
consume less food items and cereals.
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. Based on the analysis of
the consumption expenditure data collected from NSSO of 27th, 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. Indian ruralites have started spending more on pulses, milk
and milk products, edible oil, meat, egg, fish and vegetables. It is mainly being
done at the cost of inferior food items. Their behaviour is in consonance with

39

Engels law. The study also showed that with increase in income, people in general
have started moving towards consumption of superior food items in rural as well as
in urban areas.
Surabhi Mittal (2006) used the NSSO data of various rounds such as 38,
43, 50, 55 pertaining to the periods 1983, 1987-8, 1993-4,1999-2000 to review past
trends in per capita consumption of cereals and non cereals and to identify the
factors that affect changes in cereal consumption. The major findings are the
annual per capita consumption of food grains has declined between 1983 and
2000.In the last two decades, between 1983 and 1999, both in the rural and urban
regions, there has been a structural shift in consumption pattern away from cereals
to high value agricultural commodities.
Shubhashis Gangopadhyay and Wilma Wadhwa (2004)

in a report

identifies some important estimates of how households behave. They calculate the
NSS estimates of total expenditure for each of the commodity groups and compare
them with the (NAS) National Account Statistics report. The major findings of the
study are in conformity with Engels law. ie. If incomes are increasing over time,
the proportion spent on food should be falling and those on miscellaneous items
should be increasing. This is true in both urban and rural areas. Their findings are
that in urban areas the proportion spent on food fell from 63% in 1987-88 to 54%
in 1999-2000. In rural areas the drop was from 69 to 62%. Correspondingly, the
expenditure on miscellaneous rose from 18 to 25% in the urban sector, while in the
rural sector, it went up from 14 to 19%.
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. 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. The average per capita expenditure in the urban sector was always
found to be greater than its rural counterpart.
In a research survey report titled Consumption and Demand, the studies on
estimation and projection of consumer demand were analyzed by Shah(1975). The

40

study identified lack of adequate research in certain areas such as demand pattern
for individual food item, demand for non food item and the problem of poverty.
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. 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. It is found that there had been a declining trend in urban inequality compared
to rural. City inequality might have widened relative to rural and non-city urban
sector. The study also made a comparison between Kerala, Tamil Nadu, Punjab
and Haryana on the basis of their per capita income differences between rural and
urban sectors and their structural behaviour.
Based on the data from various NSSO rounds Sandhu (1985) made a
statistical comparison of consumption pattern of Punjab and Gujarat. In the study
he examined the inter state, inter regional and inter temporal variations in the
consumption pattern during the period from 1966-67 to 73-74. Empirical findings
were made by choosing the best fit Engel forms, regression coefficients,
expenditure elasticities and the percentage of expenditure on various items. The
source of heterogeneity in consumption pattern was observed in intercepts of the
covariance model. These variations are determined by differences in tastes and
preferences.
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 study used six forms of the Engel functions for
the estimation of expenditure elasticity of broad groups of items. 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 60s.The estimated expenditure
elasticities are found to be relatively low for food items while they are very high
for non food .
In a research study on consumption expenditure and inequality in rural
India, Chaturvedi (1990) examined the consumption expenditure trend and the

41

expenditure inequalities among three income groups in India. 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. There was a regular increase in per capita, total
consumer expenditure for all three income groups namely low middle and high.
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 of consumption using
Dummy variable interaction model in Orissa (DVIM). The study is based on the
grouped cross section data of 55th round (1999-2000) collected by NSSO. The
study confirms the existence of significant intersectional variation in the
consumption pattern of milk products, fish and egg; all food items; clothing,
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. There is no significant
inter sectional variation in the consumption pattern of pan, tobacco and intoxicants.
Amarjit Singh Sethi (2001) made an attempt to examine the nature and
speed of structural transformation in Indias private final consumption expenditure
along its growth, using the time-series information on the

consumption

expenditure on various goods and services. He found that the consumption

expenditure has undergone structural changes during the period of 49 years
.Relative share of expenditure on food items has declined while that on 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. This is mainly due to the
impact of green revolution coupled with the liberation and globalization policies.
Anja

Schefer

and

Andrew

Crane

(2005)

discussed

different

conceptualizations of consumption and their implications for notions of

sustainability. 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 rise of the sign value of consumer goods may
be partly behind the extraordinary increase in material consumption levels by
affluent consumers worldwide.

42

Household budget Survey data report (2002) studied the expenditure pattern
of Mauritius. It is found that the average monthly expenditure showed a rise of
about 31% from Rs, 8, 172/ in 1996- 97 to Rs 10, 725/ in 2001- 02. A smaller
percentage of budget shares was found devoted to food consumption and the
consumption pattern has changed, which reflected changing life styles and
improved standard of living. It is also found that within the food items frozen
products, prepared meals, canned vegetables, and milk preparations assumed
greater importance. Increased importance in the consumption of non-food items
such as refrigerators, gas, electricity, washing machines and washing materials also
observed. Personal transport expenditure increased by 50% where as expenditure
on rent and water charges decreased significantly.
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. 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, the consumption poverty rate
increased by more than half between 1992 and 1998, but it was found to have
declined over the 1970s and 1980s.
Andrew (2000) examined the relationship between inequality and average
household living standard by using annual time series data for Indian states.
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. Urban sectors of some states
consumption is positively correlated with subsequent inequality, but lower
inequality has generally been associated with higher future consumption level.
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. The data were collected among 75 rural
and 75 urban households in Haryana state in 2002. The major findings of the study
are At the households level consumption of food particularly leafy vegetables is
excluded from the routine diet. It is because of taste, time consumption in cleaning,

43

washing, chopping, and cooking which in turn make children anaemic. People are
becoming occupied with their work and thus neglect eating together. In the Urban
area fast-food market is rapidly catching up as parents do not have sufficient time
to cook.
Rout (2009) examined the variation in food consumption and nutritional
status of women in Orissa in rural and urban areas against different background
variables. The study is based on national family Health Survey data which
comprised of 4425 married women in the age group 15- 49. A profound variation
in the nutritional status was observed between the rural and urban women in
Orissa. As far as food consumption was concerned, urban women enjoyed a better
position in all the food items. Nutritional status was found to be positively related
with education of respondent, education of husband, household standard of living,
occupation of husband etc.
Linu Mathew (2008) in his report observed that food scenario in India is
becoming critical. Population is growing at over 1.5% while productivity of food
grains is lagging behind at meagre 1% which poses serious threat to food security
in the long run. Food grain consumption of cereals has declined from a peak of
468 gms per capita per day in 1990- 91 to 412 gms in 2005-06 , 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 .
Jha et al (2009) computed nutrient income elasticities for two
macronutrients ( carbohydrates and proteins) and five micronutrients [Calcium,
thiamine, riboflavin, carotene and iron) using All India sample of rural households
for 1994. It is shown that in each case the respective elasticities are positive and
significant. 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.
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. Within each selected
restaurant a sample of minimum 30 fast food consumers aged 15- 25 years was
selected. The major findings of the study are house wives contributed maximum

44

among fast food consumers. It is also found that Samosa, a deep fried Indian
Snack, was the most preferred (99.2%) fast food item and Pizza (22.8%) came out
to be the least preferred item. About 73.2 % of the respondents were occasional
consumers of fast food.
Hiremath (2007) observed that the food consumption pattern in India is
diversifying towards high value commodities. The decline in per capita
consumption of cereals, in particular coarse cereals has worsened the nutritional
status of the rural poor. In the case of the poor, total consumption of high value
cereals like rice has declined by 10% due to rise in prices of cereals in real terms
during the 1990s and dietary diversification towards non food grains.
Gier (2007) explored the relevant hypothesis with data from categories of
2 to 12 year old children in medically undeserved communities. They examined
fast food marketing as an influence on the fast food consumption of 2 to 12yearsold children. Parents influence childrens eating habits through the implicit and
explicit modelling of food consumption behaviour. Parents influence childrens
eating habits through the foods they purchase for and serve in the household, as
well as through their selection of places to eat and foods to buy.
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 the daily mean intake of
all food stuffs, namely. cereals, pulses, green leafy vegetables, roots and tubers,
other vegetables, fruits, fats and oils, milk and milk products and sugar and jaggery
was lower than their respective recommended dietry intake in the daily diets of
pre-school children.
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, education, transport and
communication has substantially improved in last six years to touch 12%, 15%
and 25% respectively while spending on food, clothing and tobacco significantly
reduced from 1999-2000 to 2005-06. The rising income levels coupled with
increased awareness have led to more spending by households on health care,

45

education, transport and communication. This reflects the improvement in the

standard of living particularly among the middle class.
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 49.3% while GDP grew by 58.7%. He noticed six
major changes in the consumption pattern the first is that, people are spending
proportionately less on food items; 2nd, 3rd and 4th points high lighted increased
spending on transportation, health, fuel and power. The fifth interesting change
noticed in the consumption pattern is that people are spending less on tobacco and
related items and more on beverages. Lastly, the share of communications has
gone up mainly due to greater use of private services including cellular phones in
urban and rural areas.
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, while an average urban household spends
9% under the head. Clothing which includes spending on bedding and foot wear,
too shows similar trends with expenditure in rural areas at 7% of the monthly
consumption, compared to 6% for urban areas. The survey revealed that nearly
19% of the rural population belonged to households with monthly per capita
consumption expenditure less than Rs. 365, ie spending less than Rs. 12 per person
per day on consumption, at 2005-06 prices. In urban India, 22% of the population
belonged to households with MPE less than Rs. 580 (about Rs. 19/ Person/day).
Gulati (2004) viewed that rising incomes, urbanization and changing prices
of cereals and non cereal foods are causing some tectonic shifts in the food
consumption pattern. The diet of all income groups has moved from cereals to noncereal foods. Energy intake has increased for the poor and decreased for the rich,
while fat intake has risen for all income groups. The pace of decline of cereal
consumption in the upper income group was faster than that of the lower income
groups. But even among lower-income groups, consumption of high value food
increased in the past decade. Some changes in consumption patterns can also be

46

attributed to increased female

presence in the work force and the consequent

higher spending on non home cooked food.

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. 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. It is also noted that a shift has been taking
place from cereals to other food items and services. A tendency to use more of
wheat in the place of rice was also observed.
Another household survey

conducted by NCAER (1972) on income,

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. There was a high degree of concentration of income in the middle
classes in both the rural and urban area.
In Vaidyanathans (1974) study on inequalities in living standards in rural
India., the disparities in living standards were examined among categories by
principal occupation ,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. 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.
Bardhan (1967) in his studies on the pattern of income distribution in India and on
the incidence of poverty in rural India in the 60s analysed the pattern of income
distribution and incidence of poverty in rural India. 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, Gujarat, Jammmu and Kashmir, Kerala, M.P,
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

47

and per capita household consumption in India. They held that Rath et.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. They viewed that the indices of Kerala were made by substituting
average prices in neighboring states for certain items, which were not used in their
region.
Sivakumar (1976) made a study on family size, consumption expenditure,
income and land holding among the peasantry in some villages in Tamil Nadu.
The study revealed that there exists no correlation between the consumption
expenditure of households and the family size. No correlation between the
occupational holding and family size of households could be observed. As peasant
family moves up in the income hierarchy, its demand pattern and hence its
consumption level undergoes a change.
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 also emphasized the need for a
household income survey at regular intervals for estimating trends in income
distribution.
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, occupation and family size. It is found that
assumptions of interstate homogeneity and inter temporal stability of consumer
behaviour in India are heroic. 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.
Ghataka (1985) in his study of consumer behavior in India quantifies and
analyses the personal consumption expenditure of Indians during 1950- 51 to
1972- 73. 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. He explains the regional

48

disparities of consumption / saving pattern among different income groups in

urban /rural area of India.
A new survey conducted by the Economist Magazine ( 2010) revealed that
teenage girls are increasingly living on junk food, thereby putting their long term
health at risk. In addition they are also smoking and drinking more than boys.
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, 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%. However, the share of milk and milk products, egg, fish, meat, fruits and
nuts has increased by 1%, vegetables by 2.5%, beverages, refreshments and
processed food by 2% points. Since 1972-73, where as it has decreased for cereals.
Abey P Philp (2007) in an article tried to find out whether advertisement
affect the consumption pattern in India. He used the annual long run time series
data on consumption and advertising expenditure for the period 1980-06. The
analysis reveals that there is strong bidirectional relationship between advertising
and consumption pattern in India. The major findings of the study are that
fluctuations in advertising expenditure have a positive impact on consumption
expenditure. 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.
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. Urban India has behaved differently across regions since
disposable incomes and consumption pattern

are driven by different segments.

The urban consumption in the South is mostly led by techniques and the textile
exports market. In rural India, rising prosperity and extended media reach has led
to the convergence of aspirations for branded goods across categories.
Joice John (2007) analysed the group level differences among the estimates
and their contribution to the overall differences in consumption expenditure in

49

various units in 1972-73 and 1977-78. Items such as food grains, fuel and light,
sugar, fruits, vegetables, transport and recreation showed many differences in
expenditure. Major factors which lead to the divergence are different implicit
prices of consumer goods, varied reference period, differences in classification etc.
In a study of the changing pattern of consumer demand for food grains in
India, 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. 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. Handling cost and marketing margins,
composition and quality differences among cereals and the Public Distribution
System influence the rural urban price differences in different ways. 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.
A generation ago Thorstein Veblen (1899) revealed in his inimitable style
of operation of this force, which he called conspicuous consumption. 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.
Its very essence is waste rather than utility.
Roger Mason (1981) says that conspicuous consumption is most evident
in traditional societies on the occasion of wedding and funerals. Indian society as
an example, all caste groups exhibit conspicuous consumption as a way to improve
their social standing within the state. Most people are poor, reserve their earnings
for such ceremonies to the extent of cutting down the expenditure to their basic
minimum needs. Modern illustration of this type of conspicuous consumption are
not difficult to find.

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.

50

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

51

out those personal contacts have played a vital role in the purchase decision of
respondents. 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..
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. They worked out the relationship between per
capita consumption , 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. Given the fact that per capita consumption in
Kerala since 1977-78 has consistently exceeded the national average without a
corresponding increase in income, it would appear that the remittance factor is
central to an understanding of the performance of Kerala in recent times. The
increase in per capita income as a result of remittances helped increase the
consumption of the people in Kerala. The average per capita consumer expenditure
in Kerala was below the national average till 1977-78. Since then per capita
consumer expenditure in Kerala exceeded that of India progressively reaching
41per cent above the national average in 1999- 2000.
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- 73 to 1999- 2000.

He used the expenditure method approach

with total consumption as the explanatory variables. It is found that a significant

shift in the composition of food basket from cereals to non cereals like meat, egg,
fish, milk and milk products and other food items has been observed both in rural
and urban areas. There is structural shift in the consumption budget from food to
non-food items among all the income groups. There is a boom in consumption
especially among these groups. This boom is not fully associated with the domestic
production and state income, but mainly to emigrant remittances.
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

52

national average by 20%. In 1983, the per capita consumption expenditure was Rs.
152.10 as against the national average of Rs. 125.10 and in 1999-2000 it was Rs.
816.80 as against Rs. 591 at the all India level. According to them, 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.
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. 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..
Relatively low level of nutritional status and the extent of social
development achieved in Kerala remains a puzzle .This issue was examined by
Kumar(1993) in his study on quality of life and nutritional status in Kerala. 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, coexist with
substantial under nutrition. In the case of Kerala, if the lateral measurement was
taken for measuring malnutrition, the problem became an artifact of peculiar diet
pattern of households in a particular region.
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.
Kerala has been experiencing an unprecedented consumption boom and increasing
standard of living. With only 3.4% of the countrys population, Kerala accounts for
10%of the total consumption. The value of consumer goods flowing into the state
is estimated to be in the order of Rs5000 to 6000 croers/annum.
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. Same trend is discernible in the urban area also.

53

Majority of them belongs to low income groups and their standard of living is far
below expectation.
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. The study used NSS consumer expenditure data for the period
from 1973-74 to1986-87.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. The social ambience of
transforming consumption to consumerism are advertisement, proximity to market,
credit purchasing facility, exposure to things and ways of living, ostentation,
emulation of consumer etc.
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.
(1967-68 to 1985-86). The major finding is that there was a shift away from
agricultural production to manufacturing and transportation among Indian states.
Preference for consumer durables in the rural sector has been on the increase.
Kerala recorded the average highest rate of increase in per capita consumer
expenditure. In the case of Kerala, rural urban disparity has shown a definite
tendency to decrease.
Sumedan (2009) found that special offers exert pressure on consumers to
purchase consumer durables. Upper income class and rural consumer durable
owners are more alert to make use of these discounts. The inner feeling of
necessity of consumer durables is the major source

of inspiration to purchase

them. Status consideration is a pressure factor that induces people to purchase

consumer durables.
According to Maithily (2008) demonstration effect has profound influence
in the people of Kerala. 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

54

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

55

By analyzing five rounds namely,28 ,32, 38, 42,and 45 corresponding to

the years 1973-74,1977-78,1983, 1986-87, 1989-90, 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 .By the end of the
decade it rose above the national level. Kerala recorded the highest per capita
expenditure in urban areas in contrast to the national expenditure.
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 .It is found that the NSDP recorded a growth rate of 8.99% over the
period. The aggregate consumption expenditure in the economy which formed
91.97% of the NSDP in 1975-76 showed a compounded growth rate of 6.06%
which is less than the growth rate of NSDP.
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.It revealed that the
consumption pattern of Kerala differed significantly and the proportion of
expenditure on food declined while that of nonfood increased. It also revealed that
income elasticities of commodities remained almost same for both rural and urban
areas of Kerala.
2.2 Conclusion and Research Gap
Numerous studies on consumption pattern have been undertaken in India.
Some of these studies are mostly based on NSS data and concentrated on broad
commodity groups like cereals, pulses, edible oils other food and nonfood items.
No attempt has been made to study the changing consumption pattern in Kerala
based on region, economic category, mode of purchase, place of purchase,
frequency of purchase etc. Filling the research gap is very significant in the
context of Kerala as this state has a unique consumption pattern in the country.
.

56

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