Bounding Expected Per Capita Household Consumption in the Presence of Demographic Change
This paper deals with the measurement of per capita household consumption expenditures when the household's underlying demographic structure changes during the survey period. To do this, we provide a formal definition of precisely what it means to mis-measure the household's demographic structure. We then use assumptions on demographic processes within the household during the survey period to construct bounds on expected per capita consumption expenditures. We estimate these bounds using two surveys from El Salvador, a country in which household demographic structures are very fluid. Our results reveal that these bounds can be wide suggesting that the measurement error in the household's demographic structure is non-trivial. We conclude by showing that mis-measured household size can have important implications when identifying economies of scale within the household.
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- Li Gan & Victoria Vernon, 2003. "Testing the Barten Model of Economies of Scale in Household Consumption: Toward Resolving a Paradox of Deaton and Paxson," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1361-1377, December.
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