Inequality, Neighbourhoods and Variation in Prices

Namrata Gulati () and Abhimanyu Dadu ()
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Namrata Gulati: South Asian University
Abhimanyu Dadu: Indira Gandhi Institute of Development Research

Economics Bulletin, 2014, vol. 34, issue 3, 1463-1484

Abstract: In this study we examine the link between of income inequality and wholesale price of wheat using panel data. We have weekly time series data on prices for wheat for 3 districts in Uttar Pradesh in India obtained from the Department of Economics and Statistics of the Ministry of Agriculture, Government of India (DES-MOA, GOI) for the period 2006-2011. Gini coefficient is calculated on the basis of consumption expenditure collected by National Sample Survey Organisation of India. We find that price of food grain initially increases with increase in inequality but after a point it starts declining, implying an inverted-U shape relation between the two. This relationship holds for the cross-section of societies over the period of time.

Keywords: Kalman Filter; Inequality; Prices; Neighborhood; Panel (search for similar items in EconPapers)
JEL-codes: I3 O1 (search for similar items in EconPapers)
Date: 2014-07-10
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