INTERNATIONAL DISPARITIES IN INCOME ELASTICITIES.

This article represents a preliminary attempt to explain the international disparities in income elasticities of demand with economic variables. Evidence has been found that income elasticities of demand are significantly related to the level of income and less significantly related to relative prices. The relationship between the elasticities and income underscores the need for more research on demand functions and Engel curves which, unlike the double-log function, allow for elasticities, which vary with respect to income. Important strides have already been made in this area. Much of the variation in the income elasticities of demand remains to be explained perhaps by non-economic variables. Perhaps a detailed covariance analysis using several surveys from different countries would help to resolve this problem. It would appear to be important to the study of the demand side of economic growth and structural change that we discover generalizations about the behavior of income elasticities of demand as economies develop.