An infrequency of purchase model of Greek household clothing and footwear consumption with error dependence

Abstract

Almost 22% of the total number of households in the 1993/94 Household Budget Survey report zero clothing and footwear expenditures in the survey period. This paper tests for the underlying causes of zero observations and estimates the clothing and footwear expenditure equations and the resulting consumption profiles. The results of the statistical testing indicate that the appropriate vehicle of analyzing Greek household clothing and footwear consumption is the "infrequency of purchase" limited dependent variable model adjusted for non-normality, heteroskedasticity and error dependence. The estimated results indicated that clothing and footwear consumption in Greece is income inelastic and that the household size in adult equivalents affects, as expected, positively the level of clothing and footwear expenditures.

JEL Classification: C21, C24, D11