Distributional Aspects of Inflation: Who Has Suffered Most?

Fry, Vanessa; Pashardes, Panos

doi:10.1111/j.1475-5890.1985.tb00521.x

Cited by 8 publications

(9 citation statements)

References 2 publications

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“…This is in line with Fry and Pashardes (1985), who found that, conditional on the level of expenditure and implicitly assuming IIB, large families in the U.K. have suffered relatively more from inflation than single people over the period 1974–82.…”

supporting

confidence: 89%

On estimating the cost of characteristics indices from consumer demand analysis

Lyssiotou¹

2003

Canadian J of Economics

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We examine the information content of relative equivalence scales using a multiperiod framework and argue that in the absence of Independence of Base (IB) these scales can be uniquely identified from demand analysis only when the transformations of preferences through time are the same for all household types, a property termed as Intertemporally Invariant Base (IIB) utility. Restrictions imposed by IIB on conditional demands are tested empirically and found rejected within the context of a rank-3 demand system applied to individual household data drawn from the U.K. Family Expenditure Survey 1970-86. Welfare implications of false IIB assumptions are also empirically investigated. JEL Classification: D1A propos de l'estimation du couˆt des indices caracte´ristiques a`partir de l'analyse de la demande des consommateur. Ce me´moire examine le contenu informationnel des e´chelles d'e´quivalence relative en utilisant un cadre d'analyse sur plusieurs pe´riodes, et sugge`re que, en l'absence d'une inde´pendance de la base (IB), ces e´chelles peuvent eˆtre identifie´es d'une manie`re univoque seulement si les transformations de pre´fe´rences dans le temps sont les meˆmes pour tous les types de me´nages. On nomme cette proprie´teú tilite´de base invariante dans le temps (IIB). Les restrictions ve´rifiables impose´es par IIB sur les demandes conditionnelles sont ve´rifie´es empiriquement et sont rejete´es dans le contexte d'un syste`me de demande de rang 3 applique´aux donne´es des me´nages individuels dans une e´tude des de´penses des me´nages de la Grande Bretagne 1970-86. Les implications de faux postulats IIB sont analyse´es empiriquement.

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supporting

confidence: 89%

On estimating the cost of characteristics indices from consumer demand analysis

Lyssiotou¹

2003

Canadian J of Economics

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“…The large increase in prices raised concerns among policy makers about its potential impact on the standard of living of ordinary people. As highlighted by Fry and Pashardes (1985), the erosion of incomes by inflation plays a central role both in salary negotiations and in the inflation adjustments of monetary benefits and tax allowances. Amaglobeli et al (2022) report responses to current inflation.…”

Section: Introductionmentioning

confidence: 99%

“…Brittain (1960) and Tipping (1970), analysed the unequal effects of inflation along the distribution of household incomes in the United States and Britain. Similarly, Fry and Pashardes (1985) and Crawford and Smith (2002) for the UK and Doorley et al (2022) for Ireland, focused on the entire distribution of household specific inflation rates, and also identified which types of households face higher than average inflation rates. The main limitation of these papers is that they do not account for behavioural effects, i.e.…”

Section: Introductionmentioning

confidence: 99%

Welfare and Distributional Impact of Soaring Prices in Europe

et al. 2022

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“…This paper builds on the above theoretical findings to construct a true cost of living index with explicit reference to the expenditure level and household characteristics. It is well known from textbook consumer theory (see for example, Deaton and Muellbauer, 1980b) and supported by empirical evidence (see, among others, Muellbauer, 1977;Piachaud, 1978;Fry and Pashardes, 1985 ') that expenditure level and household characteristics can account for ' These studies refer to the inflation experience of households in the UK. Fry and Pashardes (1985) show that the high inflation period 1974-1982 raised the cost of living index of the lowest income decile of households by 17 percentage points more than the cost of living index of the highest income decile.…”

mentioning

confidence: 94%

Constructing the true cost of living index from the Engel curves of the PIGLOG model

Fry

Pashardes²

1989

J of Applied Econometrics

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This paper investigates the properties of the Tornqvist index and shows how this can be used to construct a true cost of living index from a simple system of Engel curves. This allows the substitution bias inherent in a fixed weight index to be estimated using the maximum degree of commodity disaggregation available in the data. Furthermore the proposed index can be decomposed to show the impact of inflation on households with different expenditure levels and household chararacteristics. An empirical application of the method is given, using data on UK food expenditures.

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Distributional Aspects of Inflation: Who Has Suffered Most?

Cited by 8 publications

References 2 publications

On estimating the cost of characteristics indices from consumer demand analysis

On estimating the cost of characteristics indices from consumer demand analysis

Welfare and Distributional Impact of Soaring Prices in Europe

Constructing the true cost of living index from the Engel curves of the PIGLOG model

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