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Preferences, Spatial Prices and Inequality

Author

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  • Manisha Chakrabarty
  • Amita Majumder
  • Ranjan Ray

Abstract

This study examines the effect of prices on inequality in rural India during the period of economic reforms and beyond (1999/2000-2009/2010). It proposes a framework for calculating 'exact' price indices, based on the 'Exact Affine Stone Index' (EASI) demand system, and shows its usefulness by calculating spatial prices and regionally varying temporal prices that allow for both differences in preferences between states and over time. The study finds that the nature of inflation has been regressive during (1999/2000-2004/2005) and progressive during (2004/2005-2009/2010) and that the effects of temporal price inflation and spatial prices on inequality are qualitatively different.

Suggested Citation

  • 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.
    • Handle: RePEc:taf:jdevst:v:51:y:2015:i:11:p:1488-1501
    DOI: 10.1080/00220388.2015.1028534
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    References listed on IDEAS

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    1. repec:pri:rpdevs:deaton_tarozzi_prices_poverty is not listed on IDEAS
    2. McKelvey, Christopher, 2011. "Price, unit value, and quality demanded," Journal of Development Economics, Elsevier, vol. 95(2), pages 157-169, July.
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    5. Amita Majumder & Ranjan Ray & Kompal Sinha, 2012. "Calculating Rural-Urban Food Price Differentials from Unit Values in Household Expenditure Surveys: A Comparison with Existing Methods and A New Procedure," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(5), pages 1218-1235.
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    8. 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.
    9. repec:pri:rpdevs:deaton_tarozzi_prices_poverty.pdf is not listed on IDEAS
    10. Amita Majumder & Ranjan Ray & Kompal Sinha, 2015. "Estimating Purchasing Power Parities from Household Expenditure Data Using Complete Demand Systems with Application to Living Standards Comparison: India and Vietnam," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(2), pages 302-328, June.
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    17. Paul Blacklow & Ranjan Ray, 2000. "A Comparison of Income and Expenditure Inequality Estimates: The Australian Evidence, 1975–76 to 1993–94," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 33(4), pages 317-329, December.
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    Cited by:

    1. Weinand, Sebastian & von Auer, Ludwig, 2019. "Anatomy of regional price differentials: Evidence from micro price data," Discussion Papers 04/2019, Deutsche Bundesbank.
    2. Marek Šedivý & Petr Janský, 2025. "How do regional price levels affect income inequality? Household-level evidence from countries worldwide," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 74(1), pages 1-63, March.
    3. Sebastian Weinand & Ludwig von Auer, 2019. "Anatomy of Regional Price Differentials: Evidence From Micro Price Data," RatSWD Working Papers 268, German Data Forum (RatSWD).
    4. Manisha Chakrabarty & Amita Majumder & Ranjan Ray, 2018. "A Framework for the Simultaneous Measurement of Spatial Variation and Temporal Movement in Prices in a Heterogeneous Country: The Dynamic Household Regional Product Dummy Model," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(3), pages 703-730, September.
    5. Petr Jansky & Marek Sedivy, 2018. "How Do Regional Price Levels Affect Income Inequality? Household-Level Evidence from 21 Countries," Working Papers IES 2018/24, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Sep 2018.
    6. Sebastian Weinand & Ludwig von Auer, 2019. "Anatomy of Regional Price Differentials: Evidence From Micro Price Data," Research Papers in Economics 2019-03, University of Trier, Department of Economics.

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