Non-Food Expenditures and Consumption Inequality in India

Amit Basole and Deepankar Basu ()
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Deepankar Basu: Department of Economics, University of Massachusetts Amherst

UMASS Amherst Economics Working Papers from University of Massachusetts Amherst, Department of Economics

Abstract: This paper contributes to the ongoing debate about economic inequality in India during the post-reform period. We analyze consumption inequality through the hitherto neglected lens of nonfood expenditure. Using household level consumption expenditure data from the quinquennial "thick" rounds of the NSS, we show that inequality within food and non-food groups has declined, even as overall expenditure inequality has increased over time. We suggest that the rise in overall expenditure inequality is due to the increased weight in the household budget of non-food spending, which tends to be more unequal than food spending. We also show that inequality is very different across broad non-food items. Durables, education, healthcare, and consumer services show the most rapid increases in real expenditure, and also display the highest levels of inequality. Finally, we offer some possible mechanisms for this phenomenon and suggest policy measures to deal with this form of inequality.

Keywords: consumption inequality; household data; India (search for similar items in EconPapers)
JEL-codes: I31 O15 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-agr and nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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