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Consumer Expenditure Distribution In India, 1983- 2007: Evidence Of Long Pareto Tail

Author

Listed:
  • Abhik Ghosh

    (Indian Statistical Institute, Kolkata)

  • Kausik Gangopadhyay

    (Indian Institute of Management Kozhikode)

  • B. Basu

    (Indian Statistical Institute, Kolkata)

Abstract

This work presents an empirical study of the evolution of the consumer expenditure distribution in India during 1982-2007. We have used the National Sample Survey Organization data and analysed the expenditure distribution for the urban and rural sectors. It is found that this distribution is a mixture of two distributions, more particularly; it follows a lognormal in the lower tail and a Pareto distribution in the higher end. The Pareto tail consists of a remarkable 30-40% of the population in the upper end and the lower end is suitably modeled by the lognormal one. The goodness-of-fit tests endorse the proposed distribution. Moreover, the Pareto tail is widening over time for the rural sector. The Gini coefficient, a prominent measure for quality, for the expenditure distribution is found to be stable for the entire time span.

Suggested Citation

  • Abhik Ghosh & Kausik Gangopadhyay & B. Basu, 2010. "Consumer Expenditure Distribution In India, 1983- 2007: Evidence Of Long Pareto Tail," Working papers 62, Indian Institute of Management Kozhikode.
    • Handle: RePEc:iik:wpaper:62
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    References listed on IDEAS

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    1. Pagan,Adrian & Ullah,Aman, 1999. "Nonparametric Econometrics," Cambridge Books, Cambridge University Press, number 9780521355643.
    2. Erich Battistin & Richard Blundell & Arthur Lewbel, 2009. "Why Is Consumption More Log Normal than Income? Gibrat's Law Revisited," Journal of Political Economy, University of Chicago Press, vol. 117(6), pages 1140-1154, December.
    3. Xavier Sala-i-Martin, 2006. "The World Distribution of Income: Falling Poverty and … Convergence, Period," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(2), pages 351-397.
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    Cited by:

    1. Gao, Li, 2015. "Evolution of consumption distribution and model of wealth distribution in China between 1995 and 2012," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 429(C), pages 76-86.
    2. Touzani, Samir & Van Buskirk, Robert, 2016. "Estimating sales and sales market share from sales rank data for consumer appliances," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 451(C), pages 266-276.
    3. Anand Sahasranaman, 2020. "Long term dynamics of poverty transitions in India," Papers 2010.06954, arXiv.org.
    4. Chatterjee, Arnab & Chakrabarti, Anindya S. & Ghosh, Asim & Chakraborti, Anirban & Nandi, Tushar K., 2016. "Invariant features of spatial inequality in consumption: The case of India," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 442(C), pages 169-181.
    5. Parikh, Kirit S. & Parikh, Jyoti K., 2016. "Realizing potential savings of energy and emissions from efficient household appliances in India," Energy Policy, Elsevier, vol. 97(C), pages 102-111.
    6. Anand Sahasranaman & Henrik Jeldtoft Jensen, 2021. "Dynamics of reallocation within India’s income distribution," Indian Economic Review, Springer, vol. 56(1), pages 1-23, June.

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