Consumer behaviour in India

Consumer behaviour studies in India generally tend to make certain assumptions regarding the scale of preferences and the market price structure which do not seem to take into account factors like regional differences or rural-urban differentials. The present work, however, more than fulfills this shortcoming by providing complete demand systems to be used as descriptive as well as predictive tools

of consumer behaviour,

Dr Mahajan's study sets out initially to introduce and examine the received theory of consumer behaviour based on an indifference-preference hypothesis together with relevant concepts and definitions. Mahajan goes on to modify Mathur's method based equi-probability approach to approximate better the indifference surfaces for the purposes of consumer behaviour analysis, His modification thus takes care of homogeneity and additivity conditions like Wald's method and in addition satisfies the stability condition.

The prediction of tolerably precise to the extent permitted by available data-time path

of total consumption along with its components both broadly and narrowly defined, is crucial to the rational determination of investment goals and other strategic elements in planning for developing countries like India. Suggestions have therefore been made for improved methods of analysis and for the collection of data so as to make planning more effective since such exercises will be on a more realistic basis,

The study on Consumer Behaviour in India provides an excellent blend of the fundamentals of the demand analysis and its empirics within the confines of available data. The models and methods underlying the study and the results based on their articulation will, of course, be of great theoretical as well as empirical interest. This is more so in a country like India where planning is an important government activity. Despite the extremely specialised nature of the subject, the book should be very stimulating, instructive and useful.

Two aspects of demand analysis are covered in this

study. First, an operationally feasible scheme has been developed for the articulation of methods for the approximate estimation of indifference surfaces and in turn the complete demand system using two period cross section data. Second, an extensive Engel curve analysis has been carried out incorporating region, occupation and family size effects.

Dr Mahajan's absolute command over the tools and techniques of research both in quantitative mathematical economics and econometrics make the volume an extremely valuable one for the specialist and the general reader interested in the subject not to mention policy makers end planners in India. Indeed some of Dr Mahajan's ideas have found their way into the consumption Model embodied in the Draft Plan (1978-83) prepared at the time when the author was associated with the Planning Commission of India,