The Influence of Demographics and Household‐Specific Price Indices on Consumption‐Based Inequality and Welfare: A Comparison of Spain and the United States
Abstract:Previous research has suggested that inequality is lower in Spain than in the United States when it is based on income. For the present article, both inequality and social welfare are examined, with household consumption expenditures used as a proxy for household welfare. For tractability, equivalence scales depended only on the number of people in the household. Household‐specific price indices were used to express the 1990‐1991 expenditure distributions in 1981 and 1991 winter prices. Our results reveal that… Show more
“…Thus, the study argues that the measurement of income per capita can overstate the level of deprivation. In line with our results, Garner et al (2002), while discussing the consumption-based inequality and welfare of Spain and USA, argued the importance of household demographic characteristics and equivalence scale adjustments for international comparisons. It was showed that adjustment helps to overcome a bias causing an overestimation of adults’ and an underestimation of children’s needs-based equivalence weights (Borah et al , 2016; Blaylock, 1991).…”
Purpose
The purpose of this paper is to evaluate the impact of credit access on income and multidimensional poverty by providing an econometric framework.
Design/methodology/approach
The study is conducted in Assam, India and uses a quasi-experiment design to gather primary data. Econometric tools like Heckit procedure, Tobit selection equation and probit model are used for empirical purpose.
Findings
The paper finds that the level of individual welfare is influenced by equivalent factors. In addition, the study observes a larger incidence of poverty among treatment households of semiformal and informal borrowers. The study argues that formal sources are more effective in reducing the number of poor households by lifting those who are closest to the poverty line.
Research limitations/implications
The study indicates a vicious circle of income and multidimensional poverty among semiformal and informal borrowers. By tradition, as rural Assam gets a dominant role of traditional community-based financial institutions, we should develop the banking structure by involving these institutions. The study excludes other probable explanatory variables while evaluating the impact of credit access on income and multidimensional poverty, and this limitation is left to future research.
Originality/value
This is probably the first empirical paper in Assam showing the impact of credit access on multidimensional poverty by adjusting for endogeneity and selection bias.
“…Thus, the study argues that the measurement of income per capita can overstate the level of deprivation. In line with our results, Garner et al (2002), while discussing the consumption-based inequality and welfare of Spain and USA, argued the importance of household demographic characteristics and equivalence scale adjustments for international comparisons. It was showed that adjustment helps to overcome a bias causing an overestimation of adults’ and an underestimation of children’s needs-based equivalence weights (Borah et al , 2016; Blaylock, 1991).…”
Purpose
The purpose of this paper is to evaluate the impact of credit access on income and multidimensional poverty by providing an econometric framework.
Design/methodology/approach
The study is conducted in Assam, India and uses a quasi-experiment design to gather primary data. Econometric tools like Heckit procedure, Tobit selection equation and probit model are used for empirical purpose.
Findings
The paper finds that the level of individual welfare is influenced by equivalent factors. In addition, the study observes a larger incidence of poverty among treatment households of semiformal and informal borrowers. The study argues that formal sources are more effective in reducing the number of poor households by lifting those who are closest to the poverty line.
Research limitations/implications
The study indicates a vicious circle of income and multidimensional poverty among semiformal and informal borrowers. By tradition, as rural Assam gets a dominant role of traditional community-based financial institutions, we should develop the banking structure by involving these institutions. The study excludes other probable explanatory variables while evaluating the impact of credit access on income and multidimensional poverty, and this limitation is left to future research.
Originality/value
This is probably the first empirical paper in Assam showing the impact of credit access on multidimensional poverty by adjusting for endogeneity and selection bias.
“…The destination SEP measure is derived from Wave 5 personal income, also divided into quintiles. To account for individuals’ household size at Waves 1 and 5, we adjusted household and personal income based on equivalence scales (income/(household size) 0.5 ) used in the previous research for the United States ( 52 , 53 ). We estimated individuals’ intergenerational income mobility as the difference between Waves 1 and 5 income quintiles.…”
The effects of socioeconomic position (SEP) across life course accumulate and produce visible health inequalities between different socioeconomic groups. Yet, it is not well understood how the experience of intergenerational income mobility between origin and destination SEP, per se, affects health outcomes. We use data from the National Longitudinal Study of Adolescent to Adult Health collected in the United States with the outcome measure of cardiometabolic risk (CMR) constructed from data on LDL Cholesterol, Glucose MG/DL, C-reactive protein, systolic and diastolic blood pressure, and resting heart rate. Intergenerational income mobility is estimated as the difference between Wave 1 and 5 income quintiles. Diagonal reference models are used to test if intergenerational income mobility, net of origin and destination income quintile effects, is associated with CMR. We find that individuals in the lowest and the highest income quintiles have, respectively, the highest and the lowest CMR; both origin and destination income quintiles are equally important; there are no significant overall income mobility effects for different gender and race/ethnicity groups, but downward income mobility has negative health implications for individuals with poor initial health. We conclude that downward income mobility can increase inequalities in CMR in the United States by worsening the health of those who had poor health before their mobility experiences.
“…Household income was adjusted to household size using an equivalence scales method: income/(household size) 0.5 . Tertiles of household income were used when analyses were stratified by this variable.…”
IMPORTANCE Characteristics of a health care system can facilitate forgoing of health care owing to economic reasons and can influence population health. Whether health insurance deductibles are associated with forgoing of health care in a consumer-driven health care system with universal coverage, such as the Swiss health system, remains to be determined.OBJECTIVE To assess the association between insurance plan deductibles and forgoing of health care with consideration of socioeconomic factors.
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