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Inequality, Neighbourhoods and Variation in Prices

Author

Listed:
  • Namrata Gulati

    () (South Asian University)

  • Abhimanyu Dadu

    () (Indira Gandhi Institute of Development Research)

Abstract

In this study we examine the link between of income inequality and wholesale price of wheat using panel data. We have weekly time series data on prices for wheat for 3 districts in Uttar Pradesh in India obtained from the Department of Economics and Statistics of the Ministry of Agriculture, Government of India (DES-MOA, GOI) for the period 2006-2011. Gini coefficient is calculated on the basis of consumption expenditure collected by National Sample Survey Organisation of India. We find that price of food grain initially increases with increase in inequality but after a point it starts declining, implying an inverted-U shape relation between the two. This relationship holds for the cross-section of societies over the period of time.

Suggested Citation

  • Namrata Gulati & Abhimanyu Dadu, 2014. "Inequality, Neighbourhoods and Variation in Prices," Economics Bulletin, AccessEcon, vol. 34(3), pages 1463-1484.
  • Handle: RePEc:ebl:ecbull:eb-14-00078
    as

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    References listed on IDEAS

    as
    1. 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, September.
    2. Andreas Bergh & Therese Nilsson, 2014. "When More Poor Means Less Poverty: On Income Inequality and Purchasing Power," Southern Economic Journal, Southern Economic Association, vol. 81(1), pages 232-246, July.
    3. Marie Daumal, 2013. "The Impact of Trade Openness on Regional Inequality: The Cases of India and Brazil," The International Trade Journal, Taylor & Francis Journals, vol. 27(3), pages 243-280, August.
    4. Manisha Chakrabarty & Amita Majumder & Ranjan Ray, 2015. "Preferences, Spatial Prices and Inequality," Journal of Development Studies, Taylor & Francis Journals, vol. 51(11), pages 1488-1501, November.
    5. Durgesh Chandra Pathak, 2010. "Poverty and Inequality in Uttar Pradesh during 1993-94 to 2004-05 A Decomposition Analysis," Development Economics Working Papers 23022, East Asian Bureau of Economic Research.
    6. Majumder, Amita & Ray, Ranjan & Sinha, Kompal, 2015. "Spatial Comparisons Of Prices And Expenditure In A Heterogeneous Country: Methodology With Application To India," Macroeconomic Dynamics, Cambridge University Press, vol. 19(05), pages 931-989, July.
    7. Sperling, Lena Lindbjerg & Kjøller-Hansen, Anders Oskar, 2012. "Accounting for the effect of health on cross-state income inequality in India," Economics Letters, Elsevier, vol. 115(2), pages 252-255.
    8. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," Review of Economic Studies, Oxford University Press, vol. 49(1), pages 3-13.
    9. Mehtabul Azam & Abusaleh Shariff, 2011. "Income Inequality in Rural India: Decomposing the Gini by Income Sources," Economics Bulletin, AccessEcon, vol. 31(1), pages 739-748.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Kalman Filter; Inequality; Prices; Neighborhood; Panel;

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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