Measuring the Cost of Living in Mexico and the US

David Argente, Chang-Tai Hsieh and Munseob Lee

No 27806, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Cross-country price indexes are crucial to compare living standards between countries and to measure global inequality. An accurate measurement of these price indexes is a difficult task because of the lack of accurate data on the consumption patterns of different countries. We construct a unique data on prices and quantities for consumer packaged goods matched at the barcode-level across the United States and Mexico. We estimate that the Mexican real consumption relative to the United States is larger than previously estimated. We identify heterogeneity in shopping behavior, quality of products, and variety availability as important sources of bias in international price comparisons.

JEL-codes: E0 F0 O0 (search for similar items in EconPapers)
Date: 2020-09
New Economics Papers: this item is included in nep-mac
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Working Paper: Measuring the Cost of Living in Mexico and the US (2020)
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