Why Does the Engel Method Work? Food Demand, Economies of Size and Household Survey Methods
Estimates of household size economies are needed for the analysis of poverty and inequality. This paper shows that Engel estimates of size economies are large when household expenditures are obtained by respondent recall but small when expenditures are obtained by daily recording in diaries. Expenditure estimates from recall surveys appear to have measurement errors correlated with household size. As well as demonstrating the fragility of Engel estimates of size economies, these results help resolve a puzzle raised by Deaton and Paxson (1998) about differences between rich and poor countries in the effect of household size on food demand.
|Date of creation:||30 Jan 2002|
|Date of revision:|
|Note:||Published in "Oxford Bulletin of Economics and Statistics", 64(4) September 2002, pp.341-59.|
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- Lancaster, Geoffrey & Ray, Ranjan & Valenzuela, Maria Rebecca, 1999. "A Cross-Country Study of Equivalence Scales and Expenditure Inequality on Unit Record Household Budget Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(4), pages 455-82, December.
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Policy Research Working Paper Series
1332, The World Bank.
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178, Princeton, Woodrow Wilson School - Development Studies.
- Angus Deaton & Christina Paxson, 1998. "Economies of Scale, Household Size, and the Demand for Food," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 897-930, October.
- Coulter, Fiona A E & Cowell, Frank A & Jenkins, Stephen P, 1992. "Equivalence Scale Relativities and the Extent of Inequality and Poverty," Economic Journal, Royal Economic Society, vol. 102(414), pages 1067-82, September.
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- Isabel McWhinney & Harold Champion, 1974. "The Canadian Experience With Recall And Diary Methods In Consumer Expenditure Surveys," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 3, number 2, pages 411-437 National Bureau of Economic Research, Inc.
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