The modern system-wide approach to applied demand analysis emphasizes a unity between theory and applications. Its firm foundations in economic theory make it one of the most impressive areas in applied econometrics. As private consumption plays an important role in any regional or multiregional economic model, the main aim of this book is to introduce this modern system-wide approach to the topic of inter-regional consumption comparisons. This study presents a large number of applications of recent innovations in system-wide approaches using a new, specially constructed regional consumption database for Australia for the period 1975-1990. The new innovations presented include, simple data-analytic techniques for analyzing regional consumption data;and new tests based on computer simulations for hypothesis testing. The empirical results presented in the book have a number of uses. Application of the above new developments give rise to reliable estimates of income and price elasticities of demand for eight broad commodity groups, as well as for the transport and communications group, private transport, public transport and communication, in the six Australian states. A feature of these results is that a number of major empirical regularities are identified that seem to span different periods and different regions.
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