IMPACT OF CONSUMER INSTALLMENT DEBT ON FOOD EXPENDITURES Academic Article uri icon

abstract

  • Trends in consumer installment credit over the period 1980 to 1989 are discussed; as well, a twoequation recursive model is developed to identify and assess the impact of installment credit on food expenditures. The first equation concerns factors affecting the ratio of consumer installment credit to personal disposable income, namely habit persistence, expected income, the prime interest rate, the unemployment rate, and the percentage of the population aged 25 to 44. The second equation focuses on factors affecting real per capita food expenditures, namely the real price of food, real per capita personal disposable income, seasonality, and a polynomial distributed lag of the measure of the ratio of consumer installment credit to personal disposable income from the first equation. The ratio of installment credit to personal disposable income has a positive effect on food expenditures; over the long run a one percent change in this ratio leads to a 0.15 percent change in real per capita food expenditures. On average, it takes just over six months for a change in this ratio to be transferred to food expenditures. Copyright 1994, Wiley Blackwell. All rights reserved

published proceedings

  • JOURNAL OF CONSUMER AFFAIRS

author list (cited authors)

  • KIRBY, R., & CAPPS, O.

complete list of authors

  • KIRBY, R||CAPPS, O

publication date

  • January 1, 1994 11:11 AM

publisher