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The Plutocratic Gap in the CPI: Evidence from Spain

Author

Listed:
  • Mario Izquierdo

    (International Monetary Fund)

  • Eduardo Ley

    (International Monetary Fund)

  • Javier Ruiz-Castillo

    (International Monetary Fund)

Abstract

The plutocratic gap is defined as the difference between the inflation measured according to the current official consumer price index (CPI) and a democratic index in which all households receive the same weight. During 1992-97, the plutocratic gap in Spain averaged 0.055 percentage points a year. Since positive and negative gaps cancel out, however, the average absolute gap is significantly larger: 0.090 percentage points a year. For the purposes of accounting for the plutocratic gap, a 53-dimensional commodity space can be conveniently reduced to two dimensions: a luxury index and a necessities index. Copyright 2003, International Monetary Fund

Suggested Citation

  • Mario Izquierdo & Eduardo Ley & Javier Ruiz-Castillo, 2003. "The Plutocratic Gap in the CPI: Evidence from Spain," IMF Staff Papers, Palgrave Macmillan, vol. 50(1), pages 1-7.
    • Handle: RePEc:pal:imfstp:v:50:y:2003:i:1:p:7
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    Citations

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    Cited by:

    1. Eduardo Ley, 2005. "Whose inflation? A characterization of the CPI plutocratic gap," Oxford Economic Papers, Oxford University Press, vol. 57(4), pages 634-646, October.
    2. Arden Finn & Murray Leibbrandt & Morné Oosthuizen, 2014. "Poverty, Inequality, and Prices in Post-Apartheid South Africa," WIDER Working Paper Series wp-2014-127, World Institute for Development Economic Research (UNU-WIDER).
    3. Morne Oosthuizen, 2013. "Inflation Inequality In South Africa," Working Papers 13158, University of Cape Town, Development Policy Research Unit.
    4. Carlos Guerrero-de-Lizardi, 2015. "An Imperfect Approach for Looking at the Distribution of Financial and Non-Financial Wealth in Mexico 1984-2012," Remef - The Mexican Journal of Economics and Finance, Instituto Mexicano de Ejecutivos de Finanzas. Remef, September.
    5. Tavares, Francisco, 2021. "Inflation heterogeneity and its impact on inequality: evidence from the United States," MPRA Paper 105461, University Library of Munich, Germany.
    6. Okidi, John A. & Nsubuga, Vincent, 2010. "Inflation differentials among Ugandan household: 1997 - 2007," Research Reports 102497, Economic Policy Research Centre (EPRC).
    7. Constantin Bürgi, 2020. "Consumer Inflation Expectations and Household Weights," Working Papers 2020-002, The George Washington University, Department of Economics, H. O. Stekler Research Program on Forecasting.
    8. José Cuesta & Suzanne Duryea & Fidel Jaramillo & Marcos Robles, 2010. "Distributive impacts of the food price crisis in the Andean region," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(7), pages 846-865.
    9. Carlos Guerrero de Lizardi, 2015. "An Imperfect Approach for Looking at the Distribution of Financial and Non-Financial Wealth in Mexico 1984-2012," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 10(2), pages 145-158, Julio-Dic.
    10. Okidi, John A. & Nsubuga, Vincent, 2010. "Inflation Differentials Among Ugandan Households: 1997 - 2007," Research Series 150482, Economic Policy Research Centre (EPRC).
    11. Carlos Guerrero de Lizardi, 2010. "Alternative Consumer Price Indexes for Mexico," CID Working Papers 42, Center for International Development at Harvard University.
    12. Finn, Arden & Leibbrandt, Murray & Oosthuizen, Morne, 2014. "Poverty, inequality, and prices in post-apartheid South Africa," WIDER Working Paper Series 127, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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