Demand for Transport, Communication and Housing

This chapter discusses the demand for another important commodity group consisting of transport, communication and housing, conditionally for the 45 countries. If there is, for example, a dollar increase in the TCH group expenditure in the Australia, out of that one dollar, on average, consumers will allocate 76 cents on transport, 8 cents on communication and the remaining 17 cents on housing. While budget allocation for the TCH group differs among Australian consumers across differing income levels, the budget allocation on transport, communication and housing individually also varies very much across income levels. The estimated income elasticities revealed that overall, transport and communication are luxuries and housing is a necessity, both in the developed and developing countries under consideration. The own-price elasticities suggested that, in both developed and developing countries, and demand for transport, communication and housing are price inelastic.