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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- Lanjouw, Peter & Ravallion, Martin, 1995.
"Poverty and Household Size,"
Royal Economic Society, vol. 105(433), pages 1415-34, November.
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- 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.
- Deaton, A. & Paxson, C., 1997. "Economies of Scale, Household Size, and the Demand for Food," Papers 178, Princeton, Woodrow Wilson School - Development Studies.
- 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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