Unequal Expenditure Switching: Evidence from Switzerland

Raphael Auer, Ariel Burstein, Sarah Lein and Jonathan Vogel

The Review of Economic Studies, 2024, vol. 91, issue 5, 2572-2603

Abstract: What are the unequal effects of changes in consumer prices on the cost of living? In the context of changes in import prices (driven by, e.g. changes in trade costs or exchange rates), most analyses focus on variation across households in initial expenditure shares on imported goods. However, the unequal welfare effects of non-marginal foreign price changes also depend on differences in how consumers substitute between imported and domestic goods, on which there is scant evidence. Using data from Switzerland surrounding the 2015 appreciation of the Swiss franc, we provide evidence that lower-income households have higher price elasticities. We quantify the contribution of heterogeneous elasticities for the unequal welfare effects of observed price changes between 2014 and 2015 and for counterfactual shocks to the mean and dispersion of import price changes.

Keywords: Expenditure switching; Inequality; Non-homothetic preferences (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1093/restud/rdad098 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Unequal expenditure switching: Evidence from Switzerland (2023)
Working Paper: Unequal Expenditure Switching: Evidence from Switzerland (2023)
Working Paper: Unequal expenditure switching: Evidence from Switzerland (2022)
Working Paper: Unequal expenditure switching: Evidence from Switzerland (2022)
Working Paper: Unequal Expenditure Switching: Evidence from Switzerland (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:91:y:2024:i:5:p:2572-2603.

Access Statistics for this article

The Review of Economic Studies is currently edited by Thomas Chaney, Xavier d’Haultfoeuille, Andrea Galeotti, Bård Harstad, Nir Jaimovich, Katrine Loken, Elias Papaioannou, Vincent Sterk and Noam Yuchtman

More articles in The Review of Economic Studies from Review of Economic Studies Ltd
Bibliographic data for series maintained by Oxford University Press ().