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Consumption and demand
Understanding how consumers make decisions and what affects their behaviour is of key importance across a wide range of policy issues, from the analysis of indirect taxation to the assessment of competition policy. For example, the most recent developments in industrial organisation focus on how firms in imperfectly competitive markets interact, taking the structure of consumer demand as given. The nature of the equilibria that prevail in different markets depends crucially on the nature of consumer decisions.

Past research at IFS has played a leading role in the development of policy-relevant empirical models of consumer behaviour. Looking forward, our research will put the consumer at the heart of competition analysis by providing a rigorous characterisation of consumer behaviour. This is crucial for designing regulatory structures and the implementation of consumer and competition policy across many markets, from retailing to telecoms.

Our research aims to develop the analysis of consumer decision-making in conjunction with the analysis of newly available Consumer Panel data. We study behaviour in Britain in detail but also engage in comparative research on similar data in Europe and North America.

Price indices and measures of consumer welfare are fundamental inputs into many areas of policy, influencing benefit and state pension levels, and monetary policy, as well as private sector wage bargaining. Price indices vary for many reasons, including the types of goods purchased, where the purchases are made and the extent to which firms have market power. Obtaining useful price indices requires estimates of substitution possibilities and the value placed on new goods by consumers at different points in the income distribution. Demand responses are essential inputs in the design of indirect and environmental taxes. Price discrimination and the effective cost of living across different types of consumers are important for understanding the adequacy of levels of welfare benefits and pensions. The new Consumer Panel data open up an exciting new research agenda.

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Year: 379 publications
16 August 1997
W97/04
Lisa Farrell and Ian Walker
This research is concerned with the demand for lottery tickets and uses data for the UK National Lottery that records the behaviour, incomes and characteristics of almost 10,000 individuals.
16 August 1997
W97/04
Lisa Farrell and Ian Walker
This research is concerned with the demand for lottery tickets and uses data for the UK National Lottery that records the behaviour, incomes and characteristics of almost 10,000 individuals.
16 August 1997
W97/23
Tim Besley and Harvey S. Rosen
A common feature of federal systems is that tax bases are joint property.
16 August 1997
W97/06
David Miles
It is well known that over the next few decades there will be significant changes in the demographic structures of nearly all developed countries; in the absence of massive immigration, or of catastrophic new fatal illnesses, by the middle of the next century the ratio of people of working age to those of retirement age will, in many countries, be only around one half the current level.
01 August 1997
Smoothed estimates of the complex relationships between age and intakes of energy, fat, calcium and vitamin C are obtained for males and females from British National Food Survey data covering the period 197494.
01 February 1997
This paper illustrates recent trends in household consumption and personal savings in the UK and the US and discusses some theoretical models that can be used to interpret them.
01 February 1997
This paper illustrates recent trends in household consumption and personal savings in the UK and the US and discusses some theoretical models that can be used to interpret them.
01 January 1997
C062
James Banks and Sarah Tanner
In this report we describe the charitable giving behaviour of UK households over the last two decades.
01 January 1997
W97/15
This paper places the debate over using consumption or income in studies of inequality growth in a formal intertemporal setting.
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Browse publications & research

Impact on Society
IFS researchers found that the Saving Gateway was not the best way to support lower income families; government acted on this advice.
In light of Government objectives to increase environmental taxation, we investigate whether the UK tax system is becoming more or less ‘green’.
IFS researchers have monitored the extent to which some households experience higher rates of inflation than others.
IFS researchers have evaluated whether the temporary VAT cut was able to boost the economy effectively.
Government departments used IFS research to inform decision-marking about a temporary cut in VAT.
Methods developed at IFS for measuring wealth were instrumental in establishing a detailed government dataset about assets and debt in Britain.
IFS researchers present and discuss new research on retirement saving with a group of business leaders and policy makers.
IFS develops data on food prices and nutrition to build capacity for policy-relevant social science research.
In a tough economic climate IFS looks at how households are able to cope.
An IFS research fellow is leading an independent review into how to make automatic enrolment into workplace pensions operate best.
IFS researchers develop a model of the Mexican tax system that will be used by the Mexican Government analysts.
IFS researchers have investigated whether it is possible to measure the distributional impact of changes to spending on public services.
IFS researchers have investigated the relative merits of government policies designed to protect elderly households from the coldest winters.