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A Method of Calculating Regional Consumer Price Differentials with Illustrative Evidence from India

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  • D. Coondoo
  • A. Majumder
  • R. Ray

Abstract

In this paper we propose a method of estimating multilateral regional price index numbers from a given household level data set on item-wise unit values/prices. The method is closely related to the Country-Product Dummy variable model of Summers (1973). This method is likely to be particularly useful in studies of regional comparisons of poverty and inequality, optimal commodity taxes and tax reforms. To illustrate the method, we use it to calculate the regional consumer price index numbers for Eastern, Western and Southern India (taking Northern India as the reference region) separately for three categories of rural and urban households, viz., all households and those below and above the poverty line, using household level unit records of the NSS 50th round (1993-94) Consumer Expenditure Survey. Copyright 2004 Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by International Association for Research in Income and Wealth in its journal Review of Income and Wealth.

Volume (Year): 50 (2004)
Issue (Month): 1 (03)
Pages: 51-68

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Handle: RePEc:bla:revinw:v:50:y:2004:i:1:p:51-68

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Cited by:
  1. Amita Majumder & Ranjan Ray & Kompal Sinha, 2011. "The Calculation of Rural Urban Food Price Differentials from Unit Values in Household Expenditure Surveys: A new procedure and comparison with existing methods," Development Research Unit Working Paper Series, Monash University, Department of Economics 24-11, Monash University, Department of Economics.
  2. Ingvild Almas, 2012. "International Income Inequality: Measuring PPP Bias by Estimating Engel Curves for Food," American Economic Review, American Economic Association, American Economic Association, vol. 102(2), pages 1093-1117, April.
  3. Ranjan Ray & Amita Majumder & Dipankor Coondoo & Geoffrey Lancaster, 2004. "Derivation of Nutrient Prices from Household level Food Expenditure Data: Methodology and Applications," Econometric Society 2004 Australasian Meetings, Econometric Society 170, Econometric Society.
  4. Riccardo Massari & M. Grazia Pittau & Roberto Zelli, 2010. "Does regional cost-of-living reshuffle Italian income distribution?," Working Papers 166, ECINEQ, Society for the Study of Economic Inequality.
  5. Cali, Massimiliano & Farole, Thomas & Kunaka, Charles & Wagle, Swarnim, 2014. "Integrating border regions : connectivity and competitiveness in South Asia," Policy Research Working Paper Series 6987, The World Bank.
  6. L. Pieroni & D. Lanari & L. Salmasi, 2013. "Food prices and overweight patterns in Italy," The European Journal of Health Economics, Springer, Springer, vol. 14(1), pages 133-151, February.
  7. Amita Majumder & Ranjan Ray & Kompal Sinha, 2011. "Estimating Intra Country and Cross Country Purchasing Power Parities from Household Expenditure Data Using Single Equation and Complete Demand Systems Approach: India and Vietnam," Development Research Unit Working Paper Series, Monash University, Department of Economics 34-11, Monash University, Department of Economics.
  8. Amita Majumder & Ranjan Ray & Kompal Sinha, 2012. "Spatial Comparisons of Prices and Expenditure in a Heterogeneous Country: Methodology with Application to India," Development Research Unit Working Paper Series, Monash University, Department of Economics 19-12, Monash University, Department of Economics.
  9. Manisha Chakrabarty & Amita Majumder & Ranjan Ray, 2012. "Preferences, Spatial Prices and Inequality," Development Research Unit Working Paper Series, Monash University, Department of Economics 52-12, Monash University, Department of Economics.

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