Estimating the Expenditure and Price Elasticity using AIDS

This study estimated AIDS and obtained expenditure elasticity and price elasticity by consumption item. According to the estimation results, expenditure elasticity and price elasticity were obtained in accordance with consumer theory in the case of food and non-alcoholic beverages. In the case of food and non-alcoholic beverages, the expenditure elasticity estimate was 0.702, indicating that they are necessities, and the price elasticity estimate was -0.582, which conforms to the law of demand. However, in the case of other consumption items, the expenditure elasticity and price elasticity were insignificant or did not conform to consumer theory. These results suggest that food expenditure data can be usefully utilized in future studies.