Testing for poverty dominance: an application to Canada

Abstract The paper proposes and applies statistical tests for poverty dominance that check for whether poverty comparisons can be made robustly over ranges of poverty lines and classes of poverty indices. This helps provide both normative and statistical confidence in establishing poverty rankings across distributions. The tests, which can take into account the complex sampling procedures that are typically used by statistical agencies to generate household‐level surveys, are implemented using the Canadian Survey of Labour and Income Dynamics (SLID) for 1996, 1999, and 2002. Although the yearly cumulative distribution functions cross at the lower tails of the distributions, the more recent years tend to dominate earlier years for a relatively wide range of poverty lines. Failing to take into account SLID’s sampling variability (as is sometimes done) can inflate significantly one’s confidence in ranking poverty. Taking into account SLID’s complex sampling design (as has not been done before) can also decrease substantially the range of poverty lines over which a poverty ranking can be inferred.     

Precautionary motivation and consumption insurance: Empirical analysis of household consumption behavior in rural China

Based on a household survey in rural China, this paper discusses parameters such as precautionary motive, excess sensitivity, consumption insurance, and inter-temporal substitution in the household consumption function in rural China. The conclusions of the paper indicate that there is a significant precautionary motive in household consumption in rural China, but the function of consumption insurance is very limited, and the consumption is also excessively sensitive to the income change. Such parameters are different among consumers within different groups. __________ Translated from Zhongguo Nongcun Jingji 中国农村经济 (Chinese Rural Economy), 2006, (4): 12–19     

The distribution of household consumption-expenditure budget shares

This paper explores the statistical properties of household consumption-expenditure budget share distributions – defined as the share of household total expenditure spent for purchasing a specific category of commodities – for a large sample of Italian households in the period 1989–2004. We find that household budget share distributions are fairly stable over time for each specific category, but profoundly heterogeneous across commodity categories. We then derive a parametric density that is able to satisfactorily characterize (from a univariate perspective) household budget share distributions and: (i) is consistent with the observed statistical properties of the underlying levels of household consumption-expenditure distributions; (ii) can accommodate the observed across-category heterogeneity in household budget-share distributions. Finally, we taxonomize commodity categories according to the estimated parameters of the proposed density. We show that the resulting classification is consistent with the traditional economic scheme that labels commodities as necessary, luxury or inferior.     

Household wealth, public consumption and economic well-being in the United States

Standard official measures of household economic well-beingin several countries are based on money income. The generalconsensus is that such measures are limited because they ignorecertain crucial determinants of well-being. We examine two suchdeterminants—household wealth and public consumption—inthe context of the US. Our findings suggest that the level anddistribution of economic well-being is substantially alteredwhen money income is adjusted for wealth or public consumption.Over the 1989–2000 period, median well-being appears toincrease faster when these adjustments are made than when standardmoney income is used. Adding imputed rent and annuity from householdwealth to household income increases measured inequality, whileadding public consumption reduces it. However, all three measuresshow about the same rise in inequality over the period.     

Domestic GHG emissions and the responsibility of households in Spain: looking for regional differences

The aim of this article is to analyze the responsibilities of Spanish households, as final consumers, for the generation of domestic greenhouse gases emissions (GHG), by region of residence, distinguishing between NUTS 1 and NUTS 2 (autonomous regions). The motivation is the process of convergence experimented by Spanish regions based on the strong economic growth experienced by the country until 2008, which could results in different emissions responsibilities because of different lifestyles and production structures. We examine in depth the relationships between a representative household in each region and its patterns of consumption. Although we do find a relationship between per capita income and regional responsibility for pollution generation, it is based on a demand scale effect, which overlaps the effects of the regional consumption patterns. Thus, in the richest regions (Madrid, Northeast, East), despite their having a less polluting pattern than other regions, the level of per capita embodied emissions is higher, due to their higher level of consumption. This scale effect, and the linkages between regional responsibilities for emissions and household consumption patterns are analyzed using linear models based on Social Accounting Matrices. The basis of the estimations is the regional emission intensity (average emission per euro spent by each type of regional home).     

Viewpoint: Measuring the well‐being of the poor with income or consumption: a Canadian perspective

Abstract There is a long tradition of using consumption measures derived from Statistics Canada's household expenditures surveys to study material well‐being, inequality, and poverty. We offer an introduction to this research. Income and consumption measures give different pictures of the patterns of material well‐being in Canada, but the differences are not as large as in the US. We also provide a comparison to Meyer and Sullivan's results on data quality. Canadian expenditure surveys are of high quality. Unique aspects of these surveys (variation in quality control measures over time and the possibility of comparing to income tax data) provide important insights into the quality of survey data on income and consumption.     

Bowling alone, drinking together

This paper investigates to what extent youth alcohol consumption depends on consumption patterns by other household members and on social interactions outside the household. Exploiting the richness of the data, we explore the possibility of asymmetric social influences by gender and by age, the differences between use and abuse and among different types of alcohol consumption (beer, wine and spirits). Moreover, we control for contextual effects, such as variables related to neighbourhood and family background. We find that both the drinking intensity by other household members and a richer social life outside home are positively related to alcohol consumption. We also find that siblings are more influential than parents, that the mother is more influential for females and the father for males.     

Understanding China’s official statistics

In response to the three influential doubts about government statistics, this article expounds the differences between relevant common economic statistical indicators and the national account indicators that reflect demand structure and national income distribution structure. The comparisons include the following aspects: the differences between household consumption expenditure from household survey and from expenditure-based GDP; the differences between total retail sales of consumer goods and final consumption expenditure from expenditure-based GDP; the differences between government expenditure from government fiscal statistics and government consumption expenditure from expenditure-based GDP; the differences between total investment in fixed assets from investment statistics and gross fixed capital formation from expenditure-based GDP; the differences between inventories and change in inventories from expenditure-based GDP; the differences between foreign trade balance from customs statistics and net exports of goods and services from expenditure-based GDP; and the differences between household disposable income from the household survey and from the Flow of Funds Table, etc. In addition, this article answers the questions proposed by the three doubts correspondingly.     

Market moves and the information content of option prices

In this paper we estimate risk-neutral returns distributions using the prices of options written on S&P 500 index futures and investigate whether or not specific characteristics of the returns distributions might be useful information for the purpose of predicting changes in market direction. The key distributional characteristics we focus on are skewness, kurtosis, and the probability weight in the extreme tails of the implied risk-neutral returns distributions. We find that, with one possible exception, the characteristics we considered are unlikely to improve a trader's ability to predict market moves.     

MEASURING INEQUALITIES: DO HOUSEHOLD SURVEYS PAINT A REALISTIC PICTURE?

The paper addresses the issue of the accuracy of standard‐of‐living measurements using household survey data. First, it highlights the fact that lighter data collection processes in some developing countries have added to measurement errors in consumption and income aggregates measurement errors. The paper reasserts the need to apply reference guidelines to the measurement of household consumption in order to compute comparable distribution indicators across countries and over time. Second, it contends that it is hard to analyze inequality solely from consumption patterns without taking income and savings into account. Two solutions are proposed for the correction of income measurement errors: by using savings declarations and by implementing a multiple imputation procedure. The results are based on a careful analysis of the EPM93 survey of Madagascar whose design is quite close to the LSMS household surveys, and the ENV98 survey of Côte d'Ivoire representative of surveys conducted nowadays in most Sub‐Saharan African countries.     

A class of spatial econometric methods in the empirical analysis of clusters of firms in the space

In this paper we aim at identifying stylized facts in order to suggest adequate models for the co-agglomeration of industries in space. We describe a class of spatial statistical methods for the empirical analysis of spatial clusters. The main innovation of the paper consists in considering clustering for bivariate (rather than univariate) distributions. This allows uncovering co-agglomeration and repulsion phenomena between the different sectors. Furthermore we present empirical evidence on the pair-wise intra-sectoral spatial distribution of patents in Italy in 1990s. We identify some distinctive joint patterns of location between different sectors and we propose some possible economic interpretations. A previous version of this paper was presented at the Workshop on Spatial Econometrics and Statistics, held in Rome 25–27 May 2006. We wish to thank the participants for the useful comments received. The comments received by two anonymous referees are also gratefully acknowledged. They improved substantially the quality of our work.     

Public-good valuation and intra-family allocation

I derive values of marginal changes in a public good for two-person households, measured alternatively by household member i’s willingness to pay (WTP) for the good on behalf of the household, WTP _i (H), or by the sum of individual WTP values across family members, WTP(C). Households are assumed to allocate their resources in efficient Nash bargains over private and common household goods. WTP _i (H) is then defined by trade-offs between the public good and the household good, and WTP(C) by trade-offs of between the public good and private goods. WTP _i (H) is found to be higher (lower) than WTP(C) when member i has a relatively high (low) marginal valuation of the public good, but tends on average to equal WTP(C). As a consequence, individuals tend to represent households correctly on average when questioned about the household’s WTP for a public good, even when they are purely selfish and answer truthfully. Adding all members’ WTP answers on behalf of the household then leads to double counting. Pure and paternalistic altruism (the latter attached to consumption of the public good) move each member’s WTP on behalf of the household closer to the true sum of individual WTP, but only paternalistic altruism raises this sum.      

Another look at the identical tastes hypothesis on the analysis of cross-country alcohol data

A number of studies have appeared in the area of cross-country consumption comparisons, where a common system of demand equations is used to model the consumption patterns of all countries. Under this approach, tastes are taken to be the same internationally. Such an assumption of identical tastes was forcibly advocated by the dual Nobel laureates, Stigler and Becker, who argued that tastes neither change capriciously nor differ importantly between people. In this paper, we use the system-wide approach to demand analysis to analyse the alcohol consumption patterns of drinkers from 10 high-income industrialised countries and verify Stigler and Becker’s (Rev Econ Statist 59:113–118, 1977) hypothesis by testing whether pooling the data across countries is acceptable. We also present the implied demand elasticities for beer, wine and spirits for the 10 countries and discuss the use of these elasticities in policy-related applications.     

Wage,income and consumption inequality in Japan, 1981–2008: From boom to lost decades

In this paper we document the main features of the distributions of wages, earnings, consumption and wealth in Japan since the early 1980s using four main data sources: the Basic Survey on Wage Structure (BSWS), the Family Income and Expenditure Survey (FIES), the National Survey of Family Income and Expenditure (NSFIE) and the Japanese Panel Survey of Consumers (JPSC). We present an empirical analysis of inequality that specifically considers the path from individual wages and earnings, to household earnings, after-tax income, and finally consumption. We find that household earnings inequality rose substantially over this period. This rise is made up of two distinct episodes: from 1981 to 1996 all incomes rose, but they rose faster at higher percentiles; from 1996 to 2008 incomes above the 50th percentile remained flat but they fell at and below the 50th percentile. Inequality in disposable income and in consumption also rose over this period but to a lesser extent, suggesting taxes and transfers as well as insurance channels available to households helped to insulate household consumption from shocks to wages. We find the same pattern in inequality trends when we look over the life cycle of households as we do over time in the economy. Additionally we find that there are notable differences in the inequality trends for wages and hours between men and women over this period.     

房价对居民消费的跨空间影响*——基于中国278个城市空间面板数据的实证研究

本文首先基于住房财富效应，构建了房价变动对居民消费的跨空间影响的分析框架。该框架阐释了住房财富效应的区域差异：不同地区间房价的空间传导、居民的异地消费以及消费的示范效应，使得本地房价变动可能引起周边地区居民消费的连锁反应。其后，本文利用中国278个地级市2000—2018年数据，通过空间面板杜宾模型，实证考察了不同地区住房财富效应的差异，以及房价变动对居民消费的跨空间影响。结果显示：（1）虽然中国整体上存在住房财富效应，但西部城市财富效应并不显著，并且核心城市还存在负财富效应。（2）不同城市间房价对消费存在跨区影响。东部城市和核心城市对周边城市消费的正向影响很显著，而边缘城市则对周边城市消费有显著的负向影响。（3）不同城市间的消费也具有空间上的示范效应。最后，本文从房价和居民消费空间联动的视角，为政府扩大内需、调控房地产市场提供了相关政策建议。     

收入结构对家庭消费倾向和消费结构的影响*——基于心理账户视角的研究

本文关注不同收入结构对家庭消费的影响，从行为经济学视角解释了近年来中国居民消费率和非工资性收入占比同时提高的现象。本文使用中国家庭跟踪调查（CFPS）数据，采用面板数据双向固定效应模型进行分析。结果显示，转移性收入和财产性收入的边际消费倾向显著高于工资性收入和经营性收入，财产性收入的边际消费倾向最高，而工资性收入和经营性收入间的边际消费倾向无统计差异。工资性收入和经营性收入更多用于居住等生活必需支出，财产性收入和转移性收入则用于提高众多子类消费。此外，以上结果在城乡间和地区间具有异质性。     

A COMPARATIVE ANALYSIS OF HOUSEHOLD CONSUMPTION FINANCED BY INDIVIDUAL AND COLLECTIVE RESOURCES, IN FRANCE AND ITALY (1959, 1965, 1969)

In this article the authors anticipate some results of a study carried out in France and in Italy, in the framework of a wider research project aiming at analysing in some depth and at comparing the recent trends and patterns of total household consumption in some capitalist and socialist countries. ¹
The accounting scheme used to arrive at a comprehensive definition of household consumption, inclusive of the "non-market" divisible services produced by public administrations, and to identify the share of this new aggregate which is financed by collective resources, isoutlined in the first section. In the second section, the article shows the growing relative importance of publicly-supported consumption, but it also shows that during the sixties, the overall cost of divisible public services and of social benefits provided in kind or in cash was, in both countries, almost entirely auto-financed by the household sector, via social security contributions and taxes levied on that sector's income and consumption. In the third section, comparative analysis of the recent structural evolution of the "market" and the "non-market" shares of total household consumption points out the similarities and dissimilarities between the patterns and forms of private and public spending in the two countries.
The results of this analysis seem to support the thesis that unless a better integration of social policies with economic growth policies is achieved, it will not be possible to implement rational choices between the "market" and the "non-market" ways of satisfying specific population needs. The authors' conclusion is that under present circumstances, public civil expenditures will continue to rise, both in France and in Italy, more rapidly than total national resources and it will become difficult to balance total receipts and total outlays of the public sector.     

Moments of truncated <Emphasis Type="Italic">t</Emphasis> and <Emphasis Type="Italic">F</Emphasis> distributions

Truncated distributions commonly arise in economics and related areas, see, for example, Lee (Econ Lett 3:165–169, 1979), Lien (Econ Lett 19:243–247, 1985; Econ Lett 20:45–47, 1986), Burdett (Econ Lett 52:263–267, 1996), Sercu (Insur: Math and Econ 20:79–95, 1997), Abadir and Magdalinos (Econom Theory 18:1276–1287, 2002), and Horrace (J Econom 126:335–354, 2005). In this note, we consider the most commonly encountered truncated distributions with heavy tails: the truncated t distribution and the truncated F distribution. For each of these distributions, we derive explicit expressions for the moments and estimation procedures by the method of moments and the method of maximum likelihood. An application is illustrated to a popular data set in the econometric literature.