Economies of Scale in Household Consumption

Abstract

This research empirically analyses the influence of scale economies on household consumption and the resulting implications for birth-promoting policies. For this purpose, the relation between an increase in household size and food, clothing, household goods, healthcare, energy, transport as well as education expenditures per person was investigated. Data of 10,858 Georgian households from the Integrated Household Survey 2015 was evaluated using regressions. It was found that there are significant economies of scale in consumption of food, clothing and energy but diseconomies of scale for household goods, transport and education. For healthcare expenditures, no significant relation with household size was found.