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Quantifying invariant features of within-group inequality in consumption across groups

Author

Listed:
  • Anindya S. Chakrabarti

    (Indian Institute of Management)

  • Arnab Chatterjee

    (Saha Institute of Nuclear Physics)

  • Tushar Nandi

    (CTRPFP, Centre for Studies in Social Sciences)

  • Asim Ghosh

    (Aalto University School of Science)

  • Anirban Chakraborti

    (Jawaharlal Nehru University)

Abstract

We study unit-level expenditure on consumption across multiple countries and multiple years, in order to extract invariant features of consumption distribution. We show that the bulk of it is lognormally distributed, followed by a power law tail at the limit. The distributions coincide with each other under normalization by mean expenditure and log scaling even though the data is sampled across multiple dimension including, e.g. time, social structure and locations. This phenomenon indicates that the dispersions in consumption expenditure across various social and economic groups are significantly similar subject to suitable scaling and normalization. Further, the results provide a measurement of the core distributional features. Other descriptive factors including those of sociological, demographic and political nature, add further layers of variation on the this core distribution. We present a stochastic multiplicative model to quantitatively characterize the invariance and the distributional features.

Suggested Citation

  • Anindya S. Chakrabarti & Arnab Chatterjee & Tushar Nandi & Asim Ghosh & Anirban Chakraborti, 2018. "Quantifying invariant features of within-group inequality in consumption across groups," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 13(3), pages 469-490, October.
  • Handle: RePEc:spr:jeicoo:v:13:y:2018:i:3:d:10.1007_s11403-017-0189-0
    DOI: 10.1007/s11403-017-0189-0
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    Cited by:

    1. Kumar, Rishabh & Balasubramanian, Sriram & Loungani, Prakash, 2022. "Inequality and locational determinants of the distribution of living standards in India," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 59-69.
    2. Schulz, Jan & Mayerhoffer, Daniel M., 2021. "A network approach to consumption," BERG Working Paper Series 173, Bamberg University, Bamberg Economic Research Group.

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    More about this item

    Keywords

    Inequality; Invariance; Consumption distribution; Power law; Lognormal distribution;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D30 - Microeconomics - - Distribution - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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