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A Comparison of Consumer Expenditures in Quebec and Ontario*

Published online by Cambridge University Press:  07 November 2014

Kristian S. Palda
Kristian S. Palda*
Affiliation:
Claremont Graduate School
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Extract

For some time now, and with increasing frequency, it has been asserted that cultural differences between the two major language groups in Canada are marked and that these differences carry over into economic behaviour. On a less general plane it is also said that there are differences between patterns of consumption in Ontario and Quebec and that these differences are largely due to “cultural” and not economic factors. However, to date there has been no verification of the latter hypothesis.

There are several reasons for undertaking such a verification. First, it may make an indirect empirical contribution to the current debate about the existence and future development of a separate French-Canadian community, different from the rest of Canada in both cultural and economic aspects. Second, as far as it was possible to determine, there have been no investigations undertaken comparing regional patterns of consumption, possibly because most economically developed countries are considered homogeneous in this respect (but note, for instance, Belgium and Switzerland). Is it likely that two large groups of people living since “time immemorial” in a single economy and exposed to much the same economic and social pressures differ in important respects in their consumption patterns? And that these differences, if any, will tend to persist even after certain important economic and demographic variables have been controlled? Finally, on the commercial plane, if we can find significant differences in consumer expenditures (albeit confined in this study to major expenditure classes), sellers may be led to a conscious effort at the exploitation of regional market segments.

L'auteur analyse les statistiques de l'enquête gouvernementale (1959) sur les budgets des ménages urbains dans le Québec et l'Ontario dans le but de déterminer s'il y a différences importantes entre les dépenses de consommation des deux provinces. (Sont analysés seuls les postes majeurs du budget.) L'auteur emploie la méthode des moindres carrés et des variables instrumentales pour estimer les paramètres des courbes Engel pour chaque province; ensuite il compare les estimés en se servant du test F proposé par Chow, et du test standard Z de la distribution normale. Il choisit comme variables exogènes le revenu disponible ou la dépense totale, et la composition et taille du ménage (la dernière sous forme de variables auxiliares). Les résultats indiquent des différences systématiques entre les deux régions majeures francophone et anglophone du Canada.

Type
Articles
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 33 , Issue 1 , February 1967 , pp. 16 - 26
Copyright
Copyright © Canadian Political Science Association 1967

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Footnotes

*

This paper, in a slightly different version, was read at the First World Congress of the Econometric Society in Rome, September 1965.

McGill University’s French Canada Studies Programme furnished financial support for the research upon which this paper is based. Miss I. McWhinney of the Dominion Bureau of Statistics went to a great deal of trouble to supply the data in suitable form and the information necessary to unravel them. Members of the 1964 Ford Foundation–Carnegie Tech. Workshop in Quantitative Marketing provided useful criticism. Mr. David Didising of the State of New York University at Buffalo Computing Center programmed and supervised the computer calculation. Regressions upon which the results presented in this paper are based can be had on request from the author.

References

1 Houthakker's enquiries have been concerned with international comparisons. See his “An International Comparison of Household Expenditure Patterns, Commemorating the Centenary of Engel's Law,” Econometrica, XXV (1957), 532–51Google Scholar, and “The Influence of Prices and Incomes on Household Expenditure,” Bulletin of the International Institute of Statistics, XXXVII (1960), 9–22.Google Scholar

2 (62–521 Occasional) (Ottawa, 1960), hereafter cited as Survey.

3 Survey, 8. Asimakopulos, A., “Analysis of Canadian Consumer Expenditure Surveys,” this Journal (05 1965), 222–41Google Scholar, used national (not provincial) data generated by the same survey. He evaluates the reliability of the survey in considerable detail.

4 Two fundamental weaknesses of this, as of so many other cross-sectional surveys, should be mentioned: no attempt was made at distinguishing between purchase and consumption of durable consumer goods; a very heavy strain was put on the respondents' memory by asking questions regarding events that happened as long as 15 months ago. On the character of non-sampling error in Canadian government surveys in general and on the recall problem in particular, see Goldberg, S. A., “Non-Sampling Error in Household Surveys—A General Review of some Canadian Work,” Bulletin of the International Institute of Statistics, XXXVI, Part 2 (1959), 44–59.Google Scholar

5 For more detailed definitions see Survey.

6 The exception are reports on brand sales by commercial suppliers of panel data. They are not currently available for purposes of publishable research.

7 Dominion Bureau of Statistics, Trices and Trice Indexes (03 1964), 41.Google Scholar

8 DBS, Trincipal Taxes and Rates: Federal, Trovincial and Municipal Government (1960), 15–16, 21–2.Google Scholar

9 Friedman, Milton, A Theory of the Consumption Function (Princeton, 1957).Google Scholar Will recorded expenditures on such items as durable goods represent adequately “true” expenditures? To what extent ought these recorded purchases be regarded as savings? Let a lid be clamped on this particular Pandora's box of problems. The only bow taken in this direction—the data do not permit others—is to regard security and pension plan expenditures as savings.

10 Prais, S. J. and Houthakker, H. S., The Analysis of Family Budgets (Cambridge, 1955), 81.Google Scholar

11 Summers, Robert, “A Note on Least Squares Bias in Household Expenditure Analysis,” Econometrica, XXVII (1959), 121–6.CrossRefGoogle Scholar

12 Liviatan, Nissan, “Errors in Variables and Engel Curve Analysis,” Econometrica, XXIX (1961), 336–62.CrossRefGoogle Scholar

13 Asimakopulos, , “Analysis of Canadian Consumer Expenditure Surveys,” 236.Google Scholar

14 Linear regressions performed better (had smaller standard deviations of residuals) than either semi-logarithmic or logarithmic regressions and thus all the estimates are based upon them.

15 Chow, Gregory C., “Tests of Equality between Sets of Coefficients in Two Linear Regressions,” Econometrica, XXVIII (1960), 591–605.CrossRefGoogle Scholar

16 The F statistics are “significant” at about the .80 level for x 1, at .80 for x 2, at .90 for x 4, and at .85 for x 5.

17 In the United States panel data are available at cost to the academic researcher; the author is not aware of a similar possibility in Canada.