Estimating equivalence scales and non-food needs in Egypt: Parametric and semiparametric regression modeling

• Published in: PloS one Vol. 16; no. 8; p. e0256017
• Main Authors: Awwad, Fuad A, Abdel-Rahman, Suzan, Abonazel, Mohamed R
• Format: Journal Article
• Language: English
• Published: United States Public Library of Science 20.08.2021; Public Library of Science (PLoS)
• Subjects: Biology and Life Sciences; Consumer Behavior; Earth Sciences; Economic aspects; Economics - statistics & numerical data; Economics - trends; Egypt; Equipment and Supplies Utilization - statistics & numerical data; Equipment and Supplies Utilization - trends; Evaluation; Expenditures; Family Characteristics; Health Expenditures - statistics & numerical data; Health Expenditures - trends; Households; Humans; Income - statistics & numerical data; Management; Medicine and Health Sciences; People and Places; Poverty; Rural Population - statistics & numerical data; Social Sciences; Socioeconomic Factors; Egypt
• ISSN: 1932-6203; 1932-6203
• DOI: 10.1371/journal.pone.0256017

This paper investigated the appropriate specifications of Engel curves for non-food expenditure categories and estimated the deprivation indices of non-food needs in rural areas using a semi parametric examination of the presence of saturation points. The study used the extended partial linear model (EPLM) and adopted two estimation methods-the double residual estimator and differencing estimator-to obtain flexible shapes across different expenditure categories and estimate equivalence scales. We drew on data of the Egyptian Household Income, Expenditure, and Consumption Survey (HIEC). Our paper provides empirical evidence that the rankings of most non-food expenditure categories is of rank three at most. Rural households showed high economies of scale in non-food consumption, with child's needs accounting for only 10% of adult's non-food needs. Based on semi-parametrically estimated consumption behavior, the tendency of non-food expenditure categories to saturate did not emerge. While based on parametrically estimated consumption behavior, rural areas exhibited higher deprivation indices in terms of health and education expenditure categories, which indicates the need to design specific programs economically targeting such vulnerable households.