Household characteristics and consumption behaviour: a nonparametric approach

In this paper we apply nonparametric methods in order to discuss sorne empirical aspects of household consumption behaviour. First, we study the differences in the consumption behaviour between household types. We find that, except for food, there are no elear significant differences. Secondly, we derive the functional form for the food Engel curve, using specification tests consistent in the direction of nonparametric alternatives. Finally, we use this specification to discuss the misleading conelusions that could be reached from a mechanic interpretation of the rejection of Hausman's test, when applied to test the exogeneity of expenditure. The data is obtained from the Spanish Expenditure Survey 1980-81 and 1990-91