An empirical Study of consumption pattern at disaggregate level

Empirical studies on consumption patterns always explain some important insights about consumer demand through highlighting their changing habits and preferences. As economic growth takes place, the consumer's preferences change accordingly with the increasing monetary as well as real income. A significant increase in the per capita total consumer expenditure (proxy for total income) has been noted in India both at current and constant prices. This increase in per capita income of Indian consumers will lead them to change the consumption of food items. However direction of change in the consumption can only be found if we know the Engel's elasticity for different food items for Indian consumers. The present study makes an attempt to estimate the most accurate Engel elasticity of food items in India by using different demand models. The aggregate level data often provides some misleading information about the consumers' preferences. Therefore in present study we have used the disaggregate level data for estimating the Engel elasticity.