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Evaluating The Distributional Implications Of Price Movements: Methodology, Application And Australian Evidence

  • Aaron Nicholas
  • Ranjan Ray
  • Rebecca Valenzuela

This paper investigates the distributional implication of inflation in Australia. It proposes and applies a method of evaluating the nature and size of the inequality bias of price movements. In the process, the study introduces a new demographic demand model that yields sensible and well determined estimates of the general equivalence scale and the size economies of scale. The study finds that inflation in Australia during the 1990s had an inequality increasing bias and that this bias increased in the late 1990s and the first part of the new millennium. The study also provides evidence on the decomposition of overall inequality between demographic groups and compares the decomposition between the nominal and real expenditure inequalities.

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File URL: http://www.buseco.monash.edu.au/eco/research/papers/2008/3308evaluatingnicholasrayvalenzuela.pdf
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Paper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number 33/08.

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Length: 29 pages
Date of creation: 03 Nov 2008
Date of revision:
Handle: RePEc:mos:moswps:2008-33
Contact details of provider: Postal: Department of Economics, Monash University, Victoria 3800, Australia
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Web page: http://www.buseco.monash.edu.au/eco/
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