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Inflation and inequality bias in the presence of bulk purchases for food and drinks

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  • Peña, Daniel
  • Ruiz-Castillo, Javier

Abstract

We study how to improve the estimation of annual food expenditures from household budget surveys with limited information on bulk purchases. We compare three alternative imputation methods by i) estimating the average amount of over or undervaluation according to a Poisson model of the frequency of purchase, ii) measuring the impact on a food share regression of belonging to household types with different bulk purchase habits, and iii) analyzing the outliers exclusively attributable to the shortcomings of each imputation procedure. Finally, we study the implications of different alternatives on the measurement of food price inflation, food expenditure inequality, and household total expenditure inequality.

Suggested Citation

  • Peña, Daniel & Ruiz-Castillo, Javier, 1995. "Inflation and inequality bias in the presence of bulk purchases for food and drinks," DES - Working Papers. Statistics and Econometrics. WS 4514, Universidad Carlos III de Madrid. Departamento de Estadística.
    • Handle: RePEc:cte:wsrepe:4514
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    References listed on IDEAS

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    1. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    2. Coulter, Fiona A E & Cowell, Frank A & Jenkins, Stephen P, 1992. "Differences in Needs and Assessment of Income Distributions," Bulletin of Economic Research, Wiley Blackwell, vol. 44(2), pages 77-124, April.
    3. Deaton, Angus S & Ruiz-Castillo, Javier & Thomas, Duncan, 1989. "The Influence of Household Composition on Household Expenditure Patterns: Theory and Spanish Evidence," Journal of Political Economy, University of Chicago Press, vol. 97(1), pages 179-200, February.
    4. Coulter, Fiona A E & Cowell, Frank A & Jenkins, Stephen P, 1992. "Equivalence Scale Relativities and the Extent of Inequality and Poverty," Economic Journal, Royal Economic Society, vol. 102(414), pages 1067-1082, September.
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    Cited by:

    1. Javier Ruiz‐Castillo, 1998. "A Simplified Model For Social Welfare Analysis: An Application To Spain, 1973–74 To 1980–81," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(1), pages 123-141, March.

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