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Unpacking Household Engel Curves

Author

Listed:
  • Philippe de Vreyer

    (Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres)

  • Sylvie Lambert

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris)

  • Martin Ravallion

    (GU - Georgetown University [Washington], BM = WB - La Banque Mondiale = The World Bank - WBG = GBM - World Bank Group = Groupe Banque Mondiale)

Abstract

Acknowledging that decision making does not happen at the household but at the individual level, can household Engel curves be safely estimated based solely on household level data? Answering this question implies to consider the intrahousehold Engel curves (IECs) and to assess how estimates of such IECs relate to standard household Engel curves estimates. Aggregating the IECs to household level reveals confounding factors in standard household Engel curves, including intra-household inequality. A unique data set for Senegal is used to estimate IECs. Large discrepancies are found between the standard estimates of Engel curves and the consistently aggregated IECs. The main source of the discrepancy is a household fixed effect on intra-household spending behavior, which is only partially offset by differences in intra-household inequality. Results suggest that income elasticity of food consumption might be overestimated by as much as 43% by the standard household Engel curve estimation.

Suggested Citation

  • Philippe de Vreyer & Sylvie Lambert & Martin Ravallion, 2025. "Unpacking Household Engel Curves," PSE Working Papers halshs-05221771, HAL.
    • Handle: RePEc:hal:psewpa:halshs-05221771
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-05221771v1
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