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Using Engel Curves To Estimate Consumer Price Index Bias For The Elderly

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  • James Gorry
  • Dean Scrimgeour

Abstract

Over the last 30 years, the share of total expenditure devoted to food has declined more rapidly for elderly‐headed households than for other households. This decline is not explained by a more rapid increase in measured total expenditure for the elderly, or by relative change in other covariates such as household composition. We present this as evidence that the true cost of living increased more slowly for the elderly than for the nonelderly over this period, in contrast to conventional wisdom that the elderly face a higher inflation rate. (JEL E31, J14)

Suggested Citation

  • James Gorry & Dean Scrimgeour, 2018. "Using Engel Curves To Estimate Consumer Price Index Bias For The Elderly," Contemporary Economic Policy, Western Economic Association International, vol. 36(3), pages 539-553, July.
    • Handle: RePEc:bla:coecpo:v:36:y:2018:i:3:p:539-553
    DOI: 10.1111/coep.12273
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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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