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Output, prices, and the distribution of consumption in rural India

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  • Clive Bell
  • Stefan Klonner

Abstract

This article analyzes the relation among agricultural output, inflation, and the distribution of consumption in rural India, using both the Singh–Maddala and Dagum families to model the entire distribution parametrically. Employing a benchmark case in which growth is distributionally neutral and idiosyncratic shocks are completely smoothed, and using a GMM‐estimator to deal with potential simultaneity between output and consumption, we conclude that: (i) growth was not distributionally neutral; (ii) good harvests (relative to trend) yielded improvements according to first‐order stochastic dominance; (iii) slow growth before 1980 went with decreasing inequality; (iv) accelerated growth thereafter tended to increase inequality, though yielding improvements according to first‐order stochastic dominance; (v) consumption smoothing was incomplete.

Suggested Citation

  • Clive Bell & Stefan Klonner, 2005. "Output, prices, and the distribution of consumption in rural India," Agricultural Economics, International Association of Agricultural Economists, vol. 33(1), pages 29-40, July.
    • Handle: RePEc:bla:agecon:v:33:y:2005:i:1:p:29-40
    DOI: 10.1111/j.1574-0862.2005.00240.x
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    1. Ravallion, Martin & Datt, Gaurav, 1999. "When is growth pro-poor? Evidence from the diverse experiences of India's states," Policy Research Working Paper Series 2263, The World Bank.
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    2. Hertweck, Matthias & Brey, Bjoern, 2017. "The Persistent Effects of Monsoon Rainfall Shocks in India: A Nonlinear VAR Approach," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168256, Verein für Socialpolitik / German Economic Association.

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