This chapter presents an overview of consumer demand analysis. It aims to deriving demand equations such as the utility/non-utility-based approach and single-equation/system-wide approach. Basic demand analysis postulates that the quantity demanded of a good by a consumer will be determined by his/her purchasing capacity, the price of that particular good and the prices of other goods that are competing with the good under consideration, and the price of other goods that are complementing. The most popular approach is to derive demand functions by postulating that the consumer behaves as if he/she chooses the consumption basket to maximise a utility function subject to a budget constraint. Studies have also shown that household socio-demographic factors significantly affect household consumption patterns. The utility-based demand functions are obtained from the utility maximising theory.
|Title of host publication||Household Demand for Consumer Goods in Developing Countries|
|Subtitle of host publication||A Comparative Perspective with Developed Countries|
|Editors||E A Selvanathan, S Selvanathan, M Jayasinghe|
|Place of Publication||London|
|Publisher||Routledge Taylor & Francis Group|
|Number of pages||42|
|Publication status||Published - 2022|