Studying the consumption behavior of urban and rural households provides the basis for proper economic planning in order to identify and differentiate the different groups of consumer goods consumed by households, and by calculating demand elasticity, it assists economic planners in choosing economic policies, such as paying and eliminating subsidies, and creating social welfare. Statistical studies are related to household budgets and estimating household demand for major groups and subgroups of household budgets. The diversity of consumption patterns carried out by households means that the welfare effects of changes in the price of goods are different for households with different incomes. The aim of the present study is to investigate the consumption behavior of urban households in Khuzestan Province. In this regard, composite data on different groups of household consumption goods were collected and, using a composite almost ideal demand system, the seemingly unrelated regression (SUR) method was used to investigate the consumption behavior of households during the period 1401-1393.Today, studies on household budgets and the estimation of consumer demand are of great ‎importance for economic policymaking. Assessing household behavior in response to changes in prices ‎and income is important for producers, who aim to supply goods favored by households, and for ‎governments and policymakers, who seek to understand consumption patterns as a key tool for ‎achieving developmental goals and efficiently managing human resources.In many countries, the ‎implementation of inappropriate economic policies often leads to economic instability and ‎macroeconomic imbalances, such as chronic budget deficits, persistent foreign trade deficits, rising ‎inflation, and, in general, negative economic growth. Consequently, policymakers implement a set of ‎economic measures to address these challenges.‎‏ ‏Moreover, governments require a clear ‎understanding of essential goods and their demand in order to regulate markets and allocate ‎resources effectively. This, in turn, requires a precise understanding of how individuals respond to ‎changes in economic conditions, since household consumption decisions directly affect resource ‎allocation. Examining the consumption behavior of urban and rural households provides a foundation ‎for accurate economic planning, including the classification of different commodity groups and the ‎estimation of demand elasticities. Such analyses help policymakers design economic interventions, ‎including the implementation or removal of subsidies, and promote social welfare.‎



Materials and Methods

This study aims to investigate the behavior of urban households in Khuzestan province. In this ‎regard, various commodity groups, family consumer panel data collected using Almost Ideal Demand ‎System composition, Seemingly Unrelated Regression (SUR), during the period 2014-2023, consumer ‎behavior has been studied in households. In the Seemingly Unrelated Regression (SUR) method, each ‎equation is first estimated using Ordinary Least Squares (OLS). After obtaining the residuals, an ‎estimate of the variance-covariance matrix of the disturbance terms is constructed. Then, the ‎coefficients of the equations are estimated using Generalized Least Squares (GLS). One of the ‎strengths of the Almost Ideal Demand System (AIDS) is that it allows testing of theoretical restrictions.‎

The homogeneity hypothesis was tested for each equation using the Wald test . The results ‎of the homogeneity tests across different commodity groups in urban areas indicate that urban ‎consumers do not exhibit money illusion in the consumption of clothing, housing, and transportation. ‎Analysis of the own-price elasticities for different commodity groups shows that the uncompensated ‎own-price elasticities are negative for all commodity groups, and the law of demand is not violated in ‎any group. In the commodity groups for urban households in Khuzestan Province, used for ‎estimation, are as follows: Food, beverages, tobacco, and Clothing, footwear, and housing, fuel, lighting, and ‎Healthcare and medical services, Transportation and communication, Culture, recreation and ‎education, and Other goods.‎



Results and Discussion

Overall, commodities including food and beverage and tobacco products group with the group of ‎housing and fuel and lighting, healthcare, transportation and communication, entertainment and ‎alternative education gross and gross supplements are a group of clothing and footwear. Group ‎Clothes and footwear with the group of Housing and fuel and lighting, transport and communication ‎, with health care and recreation education, gross alternative and complementary gross. Housing, ‎fuel and lighting, transport and communication, with gross substitutes and supplements, including health ‎and entertainment, and education gross. Healthcare entertainment, education, and transporthave a gross ‎alternative and complementary relationship. Transport and communication with entertainment, ‎education, and gross supplements‏.َ‏



Conclusion

The results indicate that in urban areas, food and beverage and tobacco group and group of housing ‎and fuel and lighting are essential‏.‏‎ But, the clothing group is classified as a luxury category, which ‎implies that a portion of the urban population in Khuzestan Province does not have sufficient access to ‎the required clothing.Also, healthcare and medical services is considered a luxury good. The high ‎income elasticity of the culture, recreation, and education group suggests that a considerable portion ‎of households cannot afford these goods.‎