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Consumption Levels in Canada and the United States, 1947-50*
Published online by Cambridge University Press: 07 November 2014
Extract
Measures of levels of consumption in various countries are useful not only as means of comparing the utilization of goods and services in the countries concerned but also as partial indicators of the relative levels of welfare and of production in those countries. These indicators are particularly useful in international economic relations for determining contributions to mutual defence, and to the various United Nations organizations. Although the usefulness of these measures is recognized, agreement as to the best method of obtaining these measures has not been reached.
Canada and the United States were chosen for this methodological study of international levels of consumption because of the similarity of modes of living, institutions, economic systems, age and sex distributions of the population, sizes of family, and habits of consumption in the two countries. In addition the author is familiar with both countries and most of the necessary data were available. The study was confined to the period 1947 to 1950 because a series of years is more reliable for purposes of comparison than a single year in this post-war period, and because data for more recent years were not available when the methodology was tested.
A comparison of per capita national and personal incomes in Canada and the United States during the period indicated that Canadian incomes were approximately 66 per cent of American incomes. Average family incomes in the two countries were in about the same relationship; the average Canadian family received $2,233 and the average American family $3,187 in 1948. What, then, was the relative level of consumption in the two countries?
- Type
- Research Article
- Information
- Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 21 , Issue 2 , May 1955 , pp. 174 - 181
- Copyright
- Copyright © Canadian Political Science Association 1955
Footnotes
*
This is a summary of a doctoral dissertation in economics presented at the University of Illinois in June, 1953. The author wishes to acknowledge helpful comments and criticisms from Dr. Margaret Reid of the University of Chicago, Professors E. J. Working of Washington State College, E. T. Weiler of Purdue University, John F. Due of the University of Illinois, and G. Findlay Shirras of Aberdeen, Scotland.
References
1 A consumption level has been defined by Joseph S. Davis as “an aggregate of food, fuel and other non-durable goods used up, the services of houses, automobiles, clothing, and other durable and semi-durable goods utilized, and the services of human beings used, by an individual or a group in a given period of time.” Davis, Joseph S., “Standards and Content of Living,” American Economic Review, XXXV, 03, 1945, 3–4.Google Scholar
2 Similarities and contrasts of these aspects in the two countries are to be found in the appendix of the dissertation, copies of which are in the University of Illinois library.
3 D.B.S., National Accounts, Income and Expenditure, 1926–1950 (1951)Google Scholar; and U.S. Dept. of Commerce, National Income Supplement to the Survey of Current Business, 1951.Google Scholar
4 U.S. Dept. of Commerce, Bureau of the Census, Census of Population Reports, P60, no. 6; and Jenny Podoluk, “Distribution of Income by Size, Canada, 1948” (unpub.), the nou-farm sector of which was published in D.B.S., Ref. paper no. 52, Distribution of Non-Farm Incomes in Canada by Size, 1951, App. B.
5 Bennett, M. K., “International Disparities in Consumption Levels,” American Economic Review, XLI, 09, 1951, 632–49.Google Scholar
6 Dewhurst, J. Frederick and Associates, America's Needs and Resources (New York, 1947).Google Scholar
7 S. Adler and D. C. Paige, “International Comparisons of Consumption,” a mimeographed paper presented to the 14th European meeting of the Econometric Society at Cambridge, 1952.
8 The Impact of the War on Civilian Consumption in the United Kingdom, the United States and Canada (Washington, 1945).Google Scholar
9 Studies of family income and expenditure would have been used in this paper instead of per capita personal consumption expenditures if they had been available for this period in each country. The last nation-wide study of family income and expenditure in the United States was completed in 1941; an urban study was made in 1950 but detailed information has not been published to date. The last nation-wide study of family income and expenditure in Canada was undertaken in 1947–8 but detailed information had not been released when the methodology was being tested. It was released by the Dominion Bureau of Statistics during 1953.
10 The Canadian and U.S. dollars were officially at par during 1947 and 1948. Devaluation on September 19, 1949, reduced the official rate of the Canadian dollar to $0.90 U.S.; the value of the Canadian dollar calculated as an average for the 12 months during 1949 was $0,975 U.S. Effective October 2, 1950, official fixed exchange rates were cancelled in Canada and the Canadian dollar subsequently rose to a level of $0.96 U.S. in December. The average value of the Canadian dollar in 1950 was $0,909 U.S.
11 Aggregate quantity data included production adjusted for imports and exports; inventories were assumed to be constant throughout the period.
12 Prices and quantities of several hundred consumer goods and services were collected in each country; an attempt was made to keep quality constant in each case. Prices were obtained in published and unpublished form from the Dominion Bureau of Statistics in Canada and the Bureau of Labor Statistics in the United States; they were supplemented by a large number of prices collected by the author in Ottawa, Peterborough, and Toronto, Ontario, and in Champaign and Chicago, Illinois. All of these data on quantities and prices are available in the manuscript housed in the University of Illinois library.
13 It should be pointed out that the percentage distribution of total consumption expenditures among the various categories is very similar to the distribution of average expenditures for the categories in studies of family budgets. Use of the United States weights in column (Z) of Table II would not have changed the weight for any category of consumption by more than 2 percentage points.
14 Conversion of expenditures to U.S. dollars would have made the result of column (Y) lower than 67.5.