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Bounding Expected Per Capita Household Consumption in the Presence of Demographic Change

Author

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  • Timothy Halliday

    (Department of Economics, University of Hawaii at Manoa
    John A. Burns School of Medicine, University of Hawaii at Manoa)

Abstract

This paper deals with the measurement of per capita household consumption expenditures when the household's underlying demographic structure changes during the survey period. To do this, we provide a formal definition of precisely what it means to mis-measure the household's demographic structure. We then use assumptions on demographic processes within the household during the survey period to construct bounds on expected per capita consumption expenditures. We estimate these bounds using two surveys from El Salvador, a country in which household demographic structures are very fluid. Our results reveal that these bounds can be wide suggesting that the measurement error in the household's demographic structure is non-trivial. We conclude by showing that mis-measured household size can have important implications when identifying economies of scale within the household.

Suggested Citation

  • Timothy Halliday, 2006. "Bounding Expected Per Capita Household Consumption in the Presence of Demographic Change," Working Papers 200610, University of Hawaii at Manoa, Department of Economics.
    • Handle: RePEc:hai:wpaper:200610
    as

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    File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_06-10.pdf
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    References listed on IDEAS

    as
    1. Li Gan & Victoria Vernon, 2003. "Testing the Barten Model of Economies of Scale in Household Consumption: Toward Resolving a Paradox of Deaton and Paxson," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1361-1377, December.
    2. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, January.
    3. 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.
    4. Lanjouw, Peter & Ravallion, Martin, 1995. "Poverty and Household Size," Economic Journal, Royal Economic Society, vol. 105(433), pages 1415-1434, November.
    5. 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.
    6. Angus Deaton & Christina Paxson, 2003. "Engel's What? A Response to Gan and Vernon," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1378-1381, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Migration; Measurement Error; Semi-Parametric Bounds; Economies of Scale;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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