The 1995/1996 Household Income, Expenditure - (PDF, 101 mb ...

Digit Preference Indices
Digit 5 10 15 20 25 30 35 40 45
Index 1.379 1.088 1.080 1.114 1.741 1.776 2.456 1.940 2.586
50 55 60 65 70 75 80 85 90 95
2.411 2.766 2.790 2.878 3.156 3.014 3.584 3.111 3.333 2.857
This shows that as respondents get older they were more likely to respond
that their age is a digit ending in 0 or 5. Ages for younger individuals are
less biased. There is a very sharp decrease in response exactitude from age
20 to age 25.
I1.D Consumption Characteristics: Household Group Expenditures
11.6
Table 11.2 presents estimates for average total household expenditures
(in £E) for 11 main groups. Total expenditures include transfers and
premiums. Very low coefficients of variation suggest that the group estimates
(with the exception of "Premiums") are measured with high precision. Average
total expenditure per year is 6658.60 £E and therefore per capita expenditure
is 1341.65 £E. In today's exchange rate (3.4 £E = $1.00), that is $394.60.
Note that exactly half of Egyptian household budgets is spent on food
and beverages. Food is becoming less important in budgets over time. In the
1990/1991 survey, 53.43% was spent on food. Engel's Lfws associate such a
phenomenon with an increase in the standard of living.
Housing and Utilities expenditures make up the second most important
budget group (after food and beverages). An average of 55 £E per month is
spent on housing. Chapter VI will uncover more information about the demand
for dwelling space.
Table 11.3 follows on Table II.2. It shows the same group expenditures,
but breaks these down by region so that comparisons of level averages might
be made. It appears at first glance that the Frontier has high food and
beverages expenditures compared with the other regions, and it can be seen
4 See Houthakker (1957) and Deaton (1989), p. 193):
1. Given households with the same composition, there is an inverse
relationship between income and the share devoted to food;
2. Food share is positively correlated with household size.
Assuming that the two laws hold, these are the necessary requirements (not
the sufficient requirements) for stating that food share, in theory, declines as
welfare rises. Engel's approach and focus was cross-sectional: a metric of
food can be used (or any other item whose consumption rises and falls with
money incomes) when comparing two households of similar size trying to
support themselves at a given standard of living. This is the foundation upon
which equivalence scales are based (see the next chapter). Before inferring
that the standard of living has risen over time in Egypt, additional
assumptions have to be made. Empirically, measurement error is a problem.
It is not uncommon for respondents to underreport food production by as
much as 15%, and to underreport food consumption itself.