Effects of Civilian and Military Consumption on South and East Asian Countries: A Panel Data Analysis

Author:A.K. M Saifur Rashida, Md. Zahir Uddin Arifb*

Abstract:
This study is an attempt to estimate the opportunity costs of military expenditure in terms of consumption in developing economies of South and East Asian countries. Military of developing countries are highly paid comparing to their civilian counterpart. This study examines empirically comparative consumption effect between military and civilian consumption considering ten South and East Asian countries over the period 1988-2008. Empirical analysis of the study finds that the amount of marginal benefit in utility terms accrued by the extra unit expenditure on military is less than the marginal benefit accrued by the extra unit expenditure on civilian in the society as a whole. It is clear that the part of military expenditure which is used for consumption purposes has a positive multiplier effect on the economy though controversy remains about the effect of overall military expenditure on the economy. Therefore, the consumption effect of military expenditure should be accounted with compare to civilian consumption in developing society.

Keywords:Keywords: Consumption effect; Civilian consumption; Military consumption; Panel data analysis.

DOI:

International Journal of Trade & Commerce (Vol: 1 Issue:2)