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Aaron Nicholas, Ranjan Ray and Maria Rebecca Valenzuela

No 33/08, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: This paper investigates the distributional implication of inflation in Australia. It proposes and applies a method of evaluating the nature and size of the inequality bias of price movements. In the process, the study introduces a new demographic demand model that yields sensible and well determined estimates of the general equivalence scale and the size economies of scale. The study finds that inflation in Australia during the 1990s had an inequality increasing bias and that this bias increased in the late 1990s and the first part of the new millennium. The study also provides evidence on the decomposition of overall inequality between demographic groups and compares the decomposition between the nominal and real expenditure inequalities.

Keywords: Price scaling; demographic demand; real expenditure inequality; inequality aversion. (search for similar items in EconPapers)
JEL-codes: C13 D12 D31 D63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba
Date: 2008-11-03
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Journal Article: Evaluating the Distributional Implications of Price Movements: Methodology, Application and Australian Evidence (2010) Downloads
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