National and International Income Dispersion and Aggregate Expenditures

Carmen Fillat () and Joseph Francois ()
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Carmen Fillat: Universidad de Zaragoza

No 04-093/2, Tinbergen Institute Discussion Papers from Tinbergen Institute

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.

Keywords: income; distribution; aggregate; demand; demand; system; estimation; Engel; curves (search for similar items in EconPapers)
JEL-codes: D31 D12 D63 C68 (search for similar items in EconPapers)
Date: 2004-08-24
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