When do Relative Prices Matter for Measuring Income Inequality?: The Case of Food Prices in Mozambique

Channing Arndt, Sam Jones and Vincenzo Salvucci

No wp-2014-129, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: Changes in the relative prices of commodities consumed in different shares across income groups are known to influence real measures of inequality. Using household budget survey and price data in Mozambique from 2002/03 and 2008/09, we show that accounting for the relative price changes driven by the food and fuel price crisis substantially increases real inequality, by about two Gini points. This result is obtained by computing a price deflator that explicitly reflects divergent price dynamics of different product categories.

Keywords: Equality and inequality; Income; Index numbers (Economics); Prices (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: When do relative prices matter for measuring income inequality? The case of food prices in Mozambique (2015)
Working Paper: When do Relative Prices Matter for Measuring Income Inequality?: The Case of Food Prices in Mozambique (2015)
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