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Projections of Consumption Expenditure over the Third Five Year Plan of Bangladesh : 1985-90

Atiq Rahman and Omar

 

Abstract

This paper reports the findings of an exercise to project consumption expenditure over the Third Plan period of Bangladesh (1985-90) under some alternative assumptions about the growth in total expenditure and changes in income distribution. A log-normal expenditure function is used to project expenditure on specific items on the basis of calculated Engel elasticities. The use of log-normal function allows this paper to calculate a consistent set of elasticities. The exercise also lists some of the major items whose demands are likely to increase rapidly and calculates the magnitude of the increased demand.

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