IDEAS home Printed from https://ideas.repec.org/p/bge/wpaper/969.html
   My bibliography  Save this paper

Why Is Food Consumption Inequality Underestimated? A Story of Vices and Children

Author

Listed:
  • Raül Santaeulàlia-Llopis
  • Yu Zheng

Abstract

Without data on individual consumption, inequality is invariably inferred by applying adult equivalence scales to household-level consumption data. To assess the e effectiveness of these household-based measures of inequality, we exploit a rare opportunity in which individual food consumption data for each and all household members are available in China. We find that standard adult-equivalent measures understate cross-sectional individual inequality by 40%. The discrepancy is driven by the dispersion of "vices" consumption among adults -alcohol, tobacco, coffee and tea- and food among young children, which doubles that of adults. Our results suggest caution in the use of adult-equivalent scales to measure inequality.

Suggested Citation

  • Raül Santaeulàlia-Llopis & Yu Zheng, 2017. "Why Is Food Consumption Inequality Underestimated? A Story of Vices and Children," Working Papers 969, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:969
    as

    Download full text from publisher

    File URL: http://www.barcelonagse.eu/sites/default/files/working_paper_pdfs/969.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jonathan Heathcote & Kjetil Storesletten & Giovanni L. Violante, 2005. "Two Views of Inequality Over the Life Cycle," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 765-775, 04/05.
    2. Greg Kaplan, 2012. "Inequality and the life cycle," Quantitative Economics, Econometric Society, vol. 3(3), pages 471-525, November.
    3. Maurizio Mazzocco & Shiv Saini, 2012. "Testing Efficient Risk Sharing with Heterogeneous Risk Preferences," American Economic Review, American Economic Association, vol. 102(1), pages 428-468, February.
    4. Pollak, Robert A & Wales, Terence J, 1979. "Welfare Comparisons and Equivalence Scales," American Economic Review, American Economic Association, vol. 69(2), pages 216-221, May.
    5. Jeremy Lise & Shannon Seitz, 2011. "Consumption Inequality and Intra-household Allocations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(1), pages 328-355.
    6. Martin Browning & Pierre-André Chiappori & Arthur Lewbel, 2013. "Estimating Consumption Economies of Scale, Adult Equivalence Scales, and Household Bargaining Power," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(4), pages 1267-1303.
    7. Jesus Fernández-Villaverde & Dirk Krueger, 2007. "Consumption over the Life Cycle: Facts from Consumer Expenditure Survey Data," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 552-565, August.
    8. Dirk Krueger & Fabrizio Perri, 2006. "Does Income Inequality Lead to Consumption Inequality? Evidence and Theory -super-1," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(1), pages 163-193.
    9. Charles I. Jones & Peter J. Klenow, 2016. "Beyond GDP? Welfare across Countries and Time," American Economic Review, American Economic Association, vol. 106(9), pages 2426-2457, September.
    10. Jeremy Lise & Ken Yamada, 2019. "Household Sharing and Commitment: Evidence from Panel Data on Individual Expenditures and Time Use," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(5), pages 2184-2219.
    11. Behrman, Jere R., 1993. "Intrahousehold distribution and the family," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 4, pages 125-187, Elsevier.
    12. Anne Case & Angus Deaton, 2002. "Consumption, health, gender and poverty," Working Papers 261, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
    13. Beegle, Kathleen & De Weerdt, Joachim & Friedman, Jed & Gibson, John, 2012. "Methods of household consumption measurement through surveys: Experimental results from Tanzania," Journal of Development Economics, Elsevier, vol. 98(1), pages 3-18.
    14. Jonathan Heathcote & Kjetil Storesletten & Giovanni L. Violante, 2010. "The Macroeconomic Implications of Rising Wage Inequality in the United States," Journal of Political Economy, University of Chicago Press, vol. 118(4), pages 681-722, August.
    15. Raül Santaeulàlia-Llopis & Yu Zheng, 2018. "The Price of Growth: Consumption Insurance in China 1989–2009," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(4), pages 1-35, October.
    16. Deaton, Angus & Paxson, Christina, 1994. "Intertemporal Choice and Inequality," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 437-467, June.
    17. Mark Aguiar & Erik Hurst, 2013. "Deconstructing Life Cycle Expenditure," Journal of Political Economy, University of Chicago Press, vol. 121(3), pages 437-492.
    18. Margaret Grosh & Paul Glewwe, 2000. "Designing Household Survey Questionnaires for Developing Countries : Lessons from 15 Years of the Living Standards Measurement Study, Volume 2," World Bank Publications - Books, The World Bank Group, number 15194, December.
    19. Richard Blundell & Luigi Pistaferri & Itay Saporta-Eksten, 2016. "Consumption Inequality and Family Labor Supply," American Economic Review, American Economic Association, vol. 106(2), pages 387-435, February.
    20. Lambert, Sylvie & Ravallion, Martin & van de Walle, Dominique, 2014. "Intergenerational mobility and interpersonal inequality in an African economy," Journal of Development Economics, Elsevier, vol. 110(C), pages 327-344.
    21. Dirk Krueger & Fabrizio Perri & Luigi Pistaferri & Giovanni L. Violante, 2010. "Cross Sectional Facts for Macroeconomists," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 1-14, January.
    22. Olken, Benjamin A., 2005. "Revealed community equivalence scales," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 545-566, February.
    23. Haddad, Lawrence & Kanbur, Ravi, 1990. "How Serious Is the Neglect of Intra-Household Inequality?," Economic Journal, Royal Economic Society, vol. 100(402), pages 866-881, September.
    24. Attanasio, Orazio P & Weber, Guglielmo, 1995. "Is Consumption Growth Consistent with Intertemporal Optimization? Evidence from the Consumer Expenditure Survey," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1121-1157, December.
    25. Alejandrina Salcedo & Todd Schoellman & Michèle Tertilt, 2012. "Families as roommates: Changes in U.S. household size from 1850 to 2000," Quantitative Economics, Econometric Society, vol. 3(1), pages 133-175, March.
    26. Shing-Yi Wang, 2011. "State Misallocation and Housing Prices: Theory and Evidence from China," American Economic Review, American Economic Association, vol. 101(5), pages 2081-2107, August.
    27. Angus Deaton & Christina Paxson, 1998. "Economies of Scale, Household Size, and the Demand for Food," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 897-930, October.
    28. Margaret Grosh & Paul Glewwe, 2000. "Designing Household Survey Questionnaires for Developing Countries : Lessons from 15 Years of the Living Standards Measurement Study, Volume 3," World Bank Publications - Books, The World Bank Group, number 15195, December.
    29. Mark Aguiar & Erik Hurst, 2005. "Consumption versus Expenditure," Journal of Political Economy, University of Chicago Press, vol. 113(5), pages 919-948, October.
    30. Bick, Alexander & Choi, Sekyu, 2013. "Revisiting the effect of household size on consumption over the life-cycle," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2998-3011.
    31. repec:hal:pseose:halshs-00933975 is not listed on IDEAS
    32. Kathleen Beegle & Luc Christiaensen & Andrew Dabalen & Isis Gaddis, 2016. "Poverty in a Rising Africa," World Bank Publications - Books, The World Bank Group, number 22575, December.
    33. Jere R. Behrman & Anil B. Deolalikar, 1990. "The Intrahousehold Demand for Nutrients in Rural South India: Individual Estimates, Fixed Effects, and Permanent Income," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 665-696.
    34. Jay H. Hong & José-Víctor Ríos-Rull, 2012. "Life Insurance and Household Consumption," American Economic Review, American Economic Association, vol. 102(7), pages 3701-3730, December.
    35. Yasheng Huang, 2012. "How Did China Take Off?," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 147-170, Fall.
    36. Geoffrey R. Dunbar & Arthur Lewbel & Krishna Pendakur, 2013. "Children's Resources in Collective Households: Identification, Estimation, and an Application to Child Poverty in Malawi," American Economic Review, American Economic Association, vol. 103(1), pages 438-471, February.
    37. Pitt, Mark M & Rosenzweig, Mark R & Hassan, Md Nazmul, 1990. "Productivity, Health, and Inequality in the Intrahousehold Distribution of Food in Low-Income Countries," American Economic Review, American Economic Association, vol. 80(5), pages 1139-1156, December.
    38. Angus Deaton & Salman Zaidi, 2002. "Guidelines for Constructing Consumption Aggregates for Welfare Analysis," World Bank Publications, The World Bank, number 14101, April.
    39. Margaret Grosh & Paul Glewwe, 2000. "Designing Household Survey Questionnaires for Developing Countries," World Bank Publications - Books, The World Bank Group, number 25338, December.
    40. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, November.
    41. Orazio P. Attanasio & Luigi Pistaferri, 2016. "Consumption Inequality," Journal of Economic Perspectives, American Economic Association, vol. 30(2), pages 3-28, Spring.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sana Khushi & Sajid Rashid Ahmad & Ather Ashraf & Muhammad Imran, 2020. "Spatially analyzing food consumption inequalities using GIS with disaggregated data from Punjab, Pakistan," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(6), pages 1283-1298, December.
    2. Olivier Bargain & Guy Lacroix & Luca Tiberti, 2021. "Intrahousehold Resource Allocation and Individual Poverty: Assessing Collective Model Predictions against Direct Evidence on Sharing," Working Papers hal-03432676, HAL.
    3. Olivier Bargain, 2022. "Income Sources, Intra-Household Allocation And Individual Poverty," Commitment to Equity (CEQ) Working Paper Series 121, Tulane University, Department of Economics.
    4. Trinh Thi, Huong & Simioni, Michel & Thomas-Agnan, Christine, 2018. "Assessing the nonlinearity of the calorie-income relationship: An estimation strategy – With new insights on nutritional transition in Vietnam," World Development, Elsevier, vol. 110(C), pages 192-204.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Santaeulàlia-Llopis, Raül ; Zheng, Yu, 2016. "Missing Consumption Inequality: Direct Evidence from Individual Food Data," Economics Working Papers ECO2016/12, European University Institute.
    2. Leandro DE MAGALHÃES & Dongya KOH & Räul SANTAEULILA-LLOPIS, 2019. "The Cost of Consumption Smoothing: Less Schooling and less Nutrition," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 85(3), pages 181-208, September.
    3. Job Boerma & Loukas Karabarbounis, 2021. "Inferring Inequality With Home Production," Econometrica, Econometric Society, vol. 89(5), pages 2517-2556, September.
    4. De Magalhães, Leandro & Santaeulàlia-Llopis, Raül, 2018. "The consumption, income, and wealth of the poorest: An empirical analysis of economic inequality in rural and urban Sub-Saharan Africa for macroeconomists," Journal of Development Economics, Elsevier, vol. 134(C), pages 350-371.
    5. Leandro De Magalhães & Dongya Koh & Raül Santaeulàlia-Llopis, 2016. "Consumption and Expenditure in Sub-Saharan Africa," Bristol Economics Discussion Papers 16/677, School of Economics, University of Bristol, UK, revised 07 Oct 2016.
    6. Doepke, M. & Tertilt, M., 2016. "Families in Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 1789-1891, Elsevier.
    7. Bick, Alexander & Choi, Sekyu, 2013. "Revisiting the effect of household size on consumption over the life-cycle," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2998-3011.
    8. Olivier Bargain & Guy Lacroix & Luca Tiberti, 2021. "Intrahousehold Resource Allocation and Individual Poverty: Assessing Collective Model Predictions against Direct Evidence on Sharing," Working Papers hal-03432676, HAL.
    9. Raül Santaeulàlia-Llopis & Yu Zheng, 2018. "The Price of Growth: Consumption Insurance in China 1989–2009," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(4), pages 1-35, October.
    10. Andrés Erosa & Luisa Fuster & Gueorgui Kambourov, 2016. "Towards a Micro-Founded Theory of Aggregate Labour Supply," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 83(3), pages 1001-1039.
    11. Bargain, Olivier & Lacroix, Guy & Tiberti, Luca, 2018. "Validating the Collective Model of Household Consumption Using Direct Evidence on Sharing," IZA Discussion Papers 11653, Institute of Labor Economics (IZA).
    12. Patricia Apps & Ray Rees, 2022. "Inequality measurement and tax/transfer policy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(4), pages 953-984, August.
    13. Theloudis, Alexandros, 2021. "Consumption inequality across heterogeneous families," European Economic Review, Elsevier, vol. 136(C).
    14. Jonathan Heathcote & Fabrizio Perri & Giovanni L. Violante, 2010. "Unequal We Stand: An Empirical Analysis of Economic Inequality in the United States: 1967-2006," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 15-51, January.
    15. Olivier Bargain, 2022. "Income Sources, Intra-Household Allocation And Individual Poverty," Commitment to Equity (CEQ) Working Paper Series 121, Tulane University, Department of Economics.
    16. KITAO Sagiri & YAMADA Tomoaki, 2023. "The Time Trend and Life-cycle Profiles of Consumption," Discussion papers 23036, Research Institute of Economy, Trade and Industry (RIETI).
    17. Leandro De Magalhães & Raül Santaeulàlia-Llopis, 2015. "The Consumption, Income, and Wealth of the Poorest: Cross-Sectional Facts of Rural and Urban Sub-Saharan Africa for Macroeconomists," Bristol Economics Discussion Papers 15/655, School of Economics, University of Bristol, UK.
    18. THELOUDIS Alexandros, 2018. "Wages and Family Time Allocation," LISER Working Paper Series 2018-06, Luxembourg Institute of Socio-Economic Research (LISER).
    19. Donni, Olivier & Molina, José Alberto, 2018. "Household Collective Models: Three Decades of Theoretical Contributions and Empirical Evidence," IZA Discussion Papers 11915, Institute of Labor Economics (IZA).
    20. Nao Sudo & Michio Suzuki & Tomoaki Yamada, 2012. "Inequalities in Japanese Economy during the Lost Decades," CIRJE F-Series CIRJE-F-856, CIRJE, Faculty of Economics, University of Tokyo.

    More about this item

    Keywords

    food; consumption; Inequality; individual data; vices; children;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bge:wpaper:969. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bruno Guallar (email available below). General contact details of provider: https://edirc.repec.org/data/bargses.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.