Investigation of asymmetric impulse responses between average consumption propensity and average food consumption propensity
of household in Korea
Average consumption propensity (ACP) and average food consumption propensity (AFCP) are important indices for implementing macroeconomic and food policies. The present paper investigates the existence of asymmetric responses of ACP and AFCP to a positive and negative shock of each series in Korea. According to the estimation results of the Structural vector-autoregressive (SVAR) model, ACP and AFCP are analyzed to have asymmetric responses to negative and positive shocks, regardless of the shock is imposed on own or other series. The derived absolute values of the responses indicate that ACP is more influenced by AFCP, which implies the shock on AFCP is more permanent than the one on ACP. The responses of ACP and AFCP appear to be lower during the period after 1998 when the Asian financial crisis occurred. This implies that not only food consumption but also overall consumption of household have become stabilized after the Asian financial crisis.
food consumption; household expenditure; structural Vector-autoregressive model