Household expenditure data are widely used for monitoring the quality of life
of household living standards, household wellbeing and
consumption/expenditure patterns. We raise three questions for the
Savannakhet household: 1. “What are the determinants of the household’s food,
education, health and transportation expenditures?” 2. “Does the East-West
Economic Corridor or transportation sector significantly relate to the
household’s food, education, health and transportation expenditures?” 3. What
specific policies could be applied in Savannakhet province to improve
household welfare and render consumption patterns more effective? To answer
these questions, we test four hypotheses based on the previous literature and
development theory on the significance and signs of the determinants of
household expenditures using seemingly unrelated regression techniques. All
four hypotheses are rejected. This important finding implies that the previous
literature and broad economic theory are inadequate guides to development in
the specific context of present-day Savannakhet; and that the type of research
reported in this paper is often essential in developing economies if policies are
to be correctly formulated.