Consumption of Import: Evidence from Industrialized Countries
INTRODUCTIONImport oriented behavior of households is formed under affecting from a complex system of interrelated factors, is influenced by a macroeconomic situation and a world market conjuncture. Since the economic system of each country develops historically, trends in the behavior of households reflect the specificity of its development, the national peculiarities of formation and functioning of an individual country in close connection with its integration into the world economy.Demand for imported goods can be considered in two ways: firstly it provides an opportunity to benefit from the international division of labor; it allows focusing on production of the individual and most profitable sectors for the country. On the other hand, there is a threat to the economic security of the country due to its dependence on other economies. This contradiction requires creation of a specific mathematical and econometric apparatus technique which will allow the costs and benefits to correlate and makes it possible to predict the consequences of decisions. It is obvious that an increase in the level and quality of life of household's causes increasing in demands on quality of the goods consumed. The demand for those imported goods the quality of which are higher, and prices for then are comparable to the produced domestically will increase, i.e. the propensity to purchase imported goods will consistently increase. (Tishina, 2014)One of the commonly used tools to assess the future demand for imports is the factorial functions of demand for imports. There are many empirical studies of various authors devoted to assessment functions of import demand with breakdown to individual countries. In the capacity of the dependent variable reflecting the demand for imported goods they took: the importation of goods, the volume of purchases of imported goods, the volume of imports for certain categories of goods.Upon that, the major explanatory variables, according to economic theory, are indicators that reflect the country's income and the relative price of imports. The regression functions of demand use several types of indicators as an income indicator. So, the work by Gouvea R. et al. (Gouvea, 2015) analyzes the total Brazilian imports in the period from 1996 to 2010. The authors have obtained the import function and carried out its econometric assessment. The main indicator which affects imports is a domestic income. Importance of this indicator is realized by Gozgor G. (Gozgor, 2014) who conducted a study of aggregate and disaggregates demand for imported goods in China. In addition, in this study, a significant factor is the real effective exchange rate. And in the work by Yan Z. et al. (Yan and Smile, 2011) five specifications of the demand models were identified for imports depending on the macroeconomic parameters used to reflect income.The work by Wang Y. et al. (Wang Y. Lee J, 2012) has considered the following factors that influence the demand for imported goods: the real exchange rate, and revenue. The authors concluded that these figures are co integrated; and the economic environment has an impact on imports. Studies of Lo M. et al. (Lo, et al. 2007) were focused on explaining the reasons for the relationship of elasticity of demand for imported goods and GDP per capita.Arize A. et al. (Arize and Nippani, 2010) has added to the above mentioned factors in the analysis the price of imports correlated with CPI and reserves which have been quite volatile during this period. Both long term and short term periods were considered simultaneously. A study of factors influencing consumption of imported goods in China was held in the work by Thorbecke W. (Thorbecke, 2016) the author came to the conclusion that if the public authorities allow the exchange rate to change in the same way, it will push consumers to refuse to buy domestic goods and to purchase imported goods. Soderbery A. (Soderbery, 2015) proposed to evaluate the elasticity of supply and demand for imported goods while various factors change.