Prices, Inequality and Poverty: Methodology and Indian Evidence
AbstractThe contribution of this paper is both methodological and empirical. It proposes a methodology for evaluating the distributional implications of price movement for inequality and poverty measurement. The methodology is based on a distinction between inequalities in nominal expenditures, where the expenditures are either measured in nominal terms or a common price deflator is applied for all households, and that in real expenditures which takes into account the varying household preferences and differences in household composition in converting the nominal to real expenditures. Changes in relative prices will cause the inflation to affect different household groups differently depending on their household size and composition and their level of relative affluence. The empirical application to the Indian budget data sets shows the usefulness of the proposed procedures. The Indian empirical evidence is of particular interest since the period chosen (1993-2005) covered both first and second generation reforms in India. The results suggest that while rural poverty rates, in both nominal and real terms, fell sharply during this period, they were accompanied by an increase in both nominal and real expenditure inequality. In contrast, the urban poverty rates were mostly static or even increased over this period. Of further interest is the result that the price movement in both areas has been inequality reducing throughout much of this period. The study also contains a decomposition analysis of the movement in inequality and poverty rates. The decomposition is done both between family types and between social groups.
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Bibliographic InfoPaper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number 27-09.
Length: 56 pages
Date of creation: Aug 2009
Date of revision:
Contact details of provider:
Postal: Department of Economics, Monash University, Victoria 3800, Australia
Web page: http://www.buseco.monash.edu.au/eco/
More information through EDIRC
Other versions of this item:
- Ankita Mishra & Ranjan Ray, 2011. "Prices, Inequality, And Poverty: Methodology And Indian Evidence," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57(3), pages 428-448, 09.
- C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Meenakshi, J. V. & Ray, Ranjan, 2002.
"Impact of household size and family composition on poverty in rural India,"
Journal of Policy Modeling,
Elsevier, vol. 24(6), pages 539-559, October.
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- Aaron Nicholas & Ranjan Ray & Rebecca Valenzuela, 2008.
"Evaluating The Distributional Implications Of Price Movements: Methodology, Application And Australian Evidence,"
Monash Economics Working Papers
33/08, Monash University, Department of Economics.
- Aaron Nicholas & Ranjan Ray & Ma. Rebecca Valenzuela, 2010. "Evaluating the Distributional Implications of Price Movements: Methodology, Application and Australian Evidence," The Economic Record, The Economic Society of Australia, vol. 86(274), pages 352-366, 09.
- Manisha Chakrabarty & Amita Majumder & Ranjan Ray, 2012. "Preferences, Spatial Prices and Inequality," Monash Economics Working Papers 52-12, Monash University, Department of Economics.
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- Ankita Mishra & Ranjan Ray, 2013.
"Multi-Dimensional Deprivation in India During and After the Reforms: Do the Household Expenditure and the Family Health Surveys Present Consistent Evidence?,"
Social Indicators Research,
Springer, vol. 110(2), pages 791-818, January.
- Ankita Mishra & Ranjan Ray, 2010. "Multi Dimensional Deprivation in India during and after the Reforms: Do the Household Expenditure and the Family Health Surveys Present Consistent Evidence?," Monash Economics Working Papers 36-10, Monash University, Department of Economics.
- Kaushik Basu & C Marks, 2011. "Understanding Inflation and Controlling It," Working Papers id:4481, eSocialSciences.
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