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National and international income dispersion and aggregate expenditures

Author

Listed:
  • Carmen Fillat

    () (Department of Applied Economics and Economic History. University of Zaragoza.)

  • Joseph Francois

    (Tinbergen Institute Rotterdam and Center for Economic Policy Research-CEPR.)

Abstract

We examine linkages between aggregate household income, distribution of that income, and aggregate cross-country expenditure patterns. We are able to decompose income effects into international income dispersion effects (from variations in average income) and national income dispersion (income distribution) effects. This yields insights for relevant aggregate household specifications in computational policy models emphasizing household distribution of income. This also yields a consumption-pattern based inequality index that summarizes the projection of inequality through expenditure patterns. Estimation of flexible demand systems with representative expenditures (which reflects income distribution within countries) yields a significant relationship between representative consumption and cross-country demand patterns.

Suggested Citation

  • Carmen Fillat & Joseph Francois, 2004. "National and international income dispersion and aggregate expenditures," Documentos de Trabajo dt2004-06, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
  • Handle: RePEc:zar:wpaper:dt2004-06
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    File URL: http://www.dteconz.unizar.es/DT2004-06.pdf
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    References listed on IDEAS

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    1. Elena Ianchovichina & Alessandro Nicita & Isidro Soloaga, 2002. "Trade Reform and Poverty: The Case of Mexico," The World Economy, Wiley Blackwell, vol. 25(7), pages 945-972, July.
    2. Francois, Joseph & Rojas-Romagosa, Hugo, 2005. "The Construction and Interpretation of Combined Cross-Section and Time-Series Inequality Datasets," CEPR Discussion Papers 5214, C.E.P.R. Discussion Papers.
    3. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    4. Atkinson, A B, 1997. "Bringing Income Distribution in from the Cold," Economic Journal, Royal Economic Society, vol. 107(441), pages 297-321, March.
    5. Francois, Joseph F & Kaplan, Seth, 1996. "Aggregate Demand Shifts, Income Distribution, and the Linder Hypothesis," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 244-250, May.
    6. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Raúl Serrano & Vicente Pinilla, 2014. "New directions of trade for the agri-food industry: a disaggregated approach for different income countries, 1963–2000," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 23(1), pages 1-22, December.
    2. Lilas Demmou, 2010. "Le recul de l’emploi industriel en France entre 1980 et 2007. Ampleur et principaux déterminants : un état des lieux," Économie et Statistique, Programme National Persée, vol. 438(1), pages 273-296.
    3. Lilas Demmou, 2007. "Technical progress in North and welfare gains in South under nonhomothetic preferences," Working Papers halshs-00588310, HAL.

    More about this item

    Keywords

    income distribution; aggregate demand; demand system estimation; Engel curves;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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