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An Intertemporal Comparison of Income and Welfare for Two Mexican Regions


  • Héctor J. Villarreal


This paper compares the evolution of income (GDP per capita) with utility derived welfare indices for two Mexican regions from 1992-2000. A methodology is proposed based on implicit true standard of living indices. Results show that welfare dynamics differed between regions and varied considerably compared to GDP per capita measures for the same period, thereby posing three questions: how well aggregate income measures reflect welfare, the role of CPI as a cost of living index, and the existence of different thresholds for wealth and welfare conditioned on development levels. This research reaffirms the importance of household preferences in evaluating welfare.

Suggested Citation

  • Héctor J. Villarreal, 2006. "An Intertemporal Comparison of Income and Welfare for Two Mexican Regions," Working Papers 20062, Escuela de Graduados en Administración Pública y Políticas Públicas, Campus Monterrey, revised Jul 2006.
  • Handle: RePEc:egb:wpaper:20062

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    References listed on IDEAS

    1. Banks, James & Blundell, Richard & Lewbel, Arthur, 1996. "Tax Reform and Welfare Measurement: Do We Need Demand System Estimation?," Economic Journal, Royal Economic Society, vol. 106(438), pages 1227-1241, September.
    2. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
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    Cited by:

    1. Hector J. Villarreal & Ricardo Cantú, "undated". "Do Walmartians Ruled? The political power of an emerging middle class in Mexico," Working Papers 20081, Escuela de Graduados en Administración Pública y Políticas Públicas, Campus Monterrey, revised Jun 2007.
    2. Villarreal, Hector J. & Mehta, Aashish, 2005. "Inequality and Heterogeneous Returns to Education in Mexico (1992-2002)," Proceedings of the German Development Economics Conference, Kiel 2005 34, Verein für Socialpolitik, Research Committee Development Economics.

    More about this item


    Mexico; welfare; intertemporal comparison; income; CPI;

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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