Consumer expenditure distribution in India, 1983–2007: Evidence of a long Pareto tail
This work presents a comprehensive study of the evolution of the expenditure distribution in India. The consumption process is theoretically modeled based on certain physical assumptions. The proposed statistical model for the expenditure distribution may follow either a double Pareto distribution or a mixture of log-normal and Pareto distribution. The goodness-of-fit tests with the Indian data, collected from the National Sample Survey Organisation Reports for the years of 1983–2007, validate the proposal of a mixture of log-normal and Pareto distribution. The relative weight of the Pareto tail has a remarkable magnitude of approximately 10%–20% of the population. Moreover, though the Pareto tail is widening over time for the rural sector only, there is no significant change in the overall inequality measurement across the entire period of study.
Volume (Year): 390 (2011)
Issue (Month): 1 ()
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- Erich Battistin & Richard Blundell & Arthur Lewbel, 2007.
"Why is consumption more log normal than income? Gibrat's law revisited,"
IFS Working Papers
W07/08, Institute for Fiscal Studies.
- 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.
- Erich Battistin & Richard Blundell & Arthur Lewbel, 2007. "Why is Consumption More Log Normal Than Income? Gibrat's Law Revisited," Boston College Working Papers in Economics 671, Boston College Department of Economics.
- Xavier Sala-i-Martin, 2006. "The World Distribution of Income: Falling Poverty and ... Convergence, Period," The Quarterly Journal of Economics, MIT Press, vol. 121(2), pages 351-397, May.
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