consumption of durables is more variable relative to trend thanconsumption of semi-durables, and consumption of...

consumption of durables is more variable relative to trend than consumption of semi-durables, and consumption of semi-durables is more variable relative to trend than consumption of nondurables and services. Speculate on why we observe these phenomena?

Expert Solution

For durables, the products are usually not necessities and also people prefer to buy with changing incomes and spending levels on the whole which is why it is more variable than semi durable and semi durable is also more variable then non durable and this is because nondurable goods are mostly necessities such as food items, groceries etc. and these are consumed everyday which is why they have a regular pattern but not variable consumption all in all.

Rahul Sunny answered 2 years ago

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