Firm Heterogeneity in Consumption Baskets: Evidence from Home and Store Scanner Data

Faber, Benjamin; Fally, Thibault

doi:10.3386/w23101

Cited by 33 publications

(40 citation statements)

References 46 publications

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“…Third, consistent with the international evidence presented by Hallak (2006), I find a positive relationship between shipment prices and destinations' per capita income, suggesting that higher-price products are those preferred by higher-income consumers. 38 Fourth, in barcode-level retail data, Hottman, Redding, and Weinstein (2016) and Faber and Fally (2016) find that higher-price products have higher sales or appeal to consumers.…”

Section: Pattern Of Specialization and Tradementioning

confidence: 99%

The Determinants of Quality Specialization

Dingel

2015

SSRN Journal

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Section: Pattern Of Specialization and Tradementioning

confidence: 99%

The Determinants of Quality Specialization

Dingel

2015

SSRN Journal

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“…There is a growing body of literature using supermarket scanner data to investigate similar issues among specific lower-level categories (within-category), particularly for the US. See, e.g., Argente and Lee (2017), Jaravel (2017), and Faber and Fally (2017).…”

Section: Introductionmentioning

confidence: 99%

Pro-rich inflation in Europe: Implications for the measurement of inequality

Gürer

Weichenrieder

2020

German Economic Review

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This paper studies the distributional consequences of a systematic variation in expenditure shares and prices. Using European Union Household Budget Surveys and Harmonized Index of Consumer Prices data, we construct household-specific price indices and reveal the existence of a pro-rich inflation in Europe. Over the period 2001–15, the consumption bundles of the poorest deciles in 25 European countries have, on average, become 11.2 percentage points more expensive than those of the richest deciles. We find that ignoring the differential inflation across the distribution underestimates the change in the Gini (based on consumption expenditure) by almost up to 0.04 points. Cross-country heterogeneity in this change is large enough to alter the inequality ranking of numerous countries. The average inflation effect we detect is almost as large as the change in the standard Gini measure over the period of interest.

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Section: Introductionmentioning

confidence: 99%

Pro-Rich Inflation in Europe: Implications for the Measurement of Inequality

Weichenrieder

Gürer

2018

SSRN Journal

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The development of inequality has received increasing attention in recent years. While inequality of disposable income has significantly increased in some countries, it was rather stable in other European countries. One possible weakness of existing studies that try to document the development of inequality is the use of a uniform consumer price inflation rate (CPI). Using such a common CPI implicitly assumes that the consumption baskets of low income households are subject to the same price increase as the consumption baskets of more affluent households. However, if price increases are more prevalent for goods that are disproportionally consumed by poorer households, then the standard approach of studying inequality measures over time will underestimate the change in inequality. Against this background, the present paper studies the distributional consequences of a systematic variation in expenditure shares and prices. Using European Union Household Budget Surveys and Harmonized Index of Consumer Prices data, we construct householdspecific price indices and ask whether inflation in recent years was lower for households belonging to upper deciles. Within a sample of 25 EU countries over the period 2001-15, our calculations reveal the existence of a pro-rich inflation. This means that, compared to consumption baskets consumed by lower deciles, the consumption baskets of the more affluent deciles had a lower inflation rate. This holds for almost all countries. Across countries, the consumption bundles of the poorest deciles have, on average, become 10.5 percentage points more expensive than those of the richest decile. This translates in a yearly inflation difference of 0.72 percentage points and is a considerable difference if compared to the average CPI of 2.67%. We find that ignoring the differential inflation across the distribution underestimates the change in the Gini measure (based on consumption expenditure) by up to 0.03 points. The inflation effect is not uniform across countries. Therefore, the crosscountry heterogeneity of pro-rich inflation is large enough to alter the inequality ranking of numerous countries. The average inflation effect we detect is almost as large as the change in the standard Gini measure over the period of interest. For many countries, the usual inequality measures do not indicate a pronounced change. Our results may help explaining the general concern among Europeans about increasing inequality that nevertheless seems to exist. Our study raises the question of how governments should react with their income redistribution to different inflation rates for differently affluent households.

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Firm Heterogeneity in Consumption Baskets: Evidence from Home and Store Scanner Data

Cited by 33 publications

References 46 publications

The Determinants of Quality Specialization

The Determinants of Quality Specialization

Pro-rich inflation in Europe: Implications for the measurement of inequality

Pro-Rich Inflation in Europe: Implications for the Measurement of Inequality

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