With economic and social progression of the nation the minimal basket of basic human needs which a society would expect for its citizen may be expected to keep expanding. These changes in the basic needs of the society may be affordable by the level of income. The level of income of the households ensures the minimum standard of living in the society.

Household i

Home

ncome and consumption expenditure are two direct monetary measures used in assessing the economic well-being of a population. However, consumption expenditure is pre­ferred to income as it reflects long-term economic status of the household, particularly in low income countries (Friedman 1957). It is important to note however that expenditures are not similar with income, which may even be a better indicator of well-being, for various reasons. Among them is the possibility of consumption without expenditures at least within the same period. According to Atkinson, (1998), “Expenditures are thus supposed to better reflect “long-term” or “permanent” income and are from this point of view considered to be a better measure of economic well-being and respective inequalities”.

Besides, in developing countries, income estimates are under-reported, drawn from multiple sources and vary across seasons. Though the consumption expenditure data are collected in many developing countries including India, the process is time-consuming, expensive and needs adjustment for household size, composition and for price level. Owing to these difficulties, the economic proxies (consumer durables, housing quality and household amenities) are collected to measure the economic sta­tus of the households in both small-and large-scale population-based surveys.

Inter Disciplinary Relevance:

In the context of the growth performance during these two decades, economists and policymakers have become interested in the trends in regional inequality during this period. Rising regional inequality can create economic, social and political problems for any country. For the Indian economy, it has serious ramification for the continuation of the reform process. Hence, it is of utmost importance to understand the regional disparity in terms of consumption expenditure on consumer durables, housing quality and household amenities of the economy.

Household expenditures as they result from budget limitations at the one hand and choices based on needs, demand, preferences etc. on the other may be regarded as manifestations of economic and social inequalities as well as cultural differences and social distinctions. Studying the patterns, disparities and determinants of household expenditures and their changes across time by making use of large scale population surveys thus seem to be promising in various respects. At a most general level it may provide insights into general consumption behaviour as a major source of human well-being and respective choices and restrictions.

Investigating household expenditures and consumption patterns is considered to be key for the monitoring and explanation of inequalities and changes in material living standards and general welfare. Studying expenditures and consumption behaviour of households also seems to be an important and promising strategy to extend and supplement mainstream approaches of studying inequality as a key topic of sociological and economic research.

As one would expect, research on household expenditures and consumption is much more common and popular among economists and looks back to a long tradition in economics (Stigler, 1954). This issue was also addressed by Houthakker (1957) as early as in the 1950s.

The issues related to household expenditures and consumption have been disregarded in sociology and particularly empirical sociological research to a large degree, although family and household budget data frequently used for empirical study in the early days. Some observers and commentators of developments in sociological research thus conclude that consumption has been strongly neglected in sociological research (Rosenkranz and Schneider, 2000). Thus it is an area which needs greater attention to be paid.

Review of Research and Development in the Subject:

International status

Although there is a long history of research on patterns of household expenditures and their changes across time, which goes back to the 19th century and the famous work by Ernst Engel and others, these questions have attracted surprisingly little attention in recent years.

Blacklow and Ray, (2000) in their paper compare, using Australian unit record data, income and expenditure inequalities over the period 1975-76 to 1993-94. The study finds inconsistencies between the two inequality movements over much of this period. They, also, observe differences in the nature of income and consumption disparities.