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Why Is Food Consumption Inequality Underestimated? A Story of Vices and Children

Raul Santaeulalia-Llopis and Yu Zheng

No 969, Working Papers from Barcelona Graduate School of Economics

Abstract: Without data on individual consumption, inequality is invariably inferred by applying adult equivalence scales to household-level consumption data. To assess the e effectiveness of these household-based measures of inequality, we exploit a rare opportunity in which individual food consumption data for each and all household members are available in China. We find that standard adult-equivalent measures understate cross-sectional individual inequality by 40%. The discrepancy is driven by the dispersion of "vices" consumption among adults -alcohol, tobacco, coffee and tea- and food among young children, which doubles that of adults. Our results suggest caution in the use of adult-equivalent scales to measure inequality.

Keywords: food; consumption; Inequality; individual data; vices; children (search for similar items in EconPapers)
JEL-codes: D12 E21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-tra
Date: 2017-05
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