ESTIMATING SPATIAL CONSUMER PRICE INDICES THROUGH ENGEL CURVE ANALYSIS

In this paper we propose a method of estimating spatial multilateral price index numbers from cross‐section consumer expenditure data on different items using Engel curve analysis. The novelty of the procedure is that it overcomes the problem of data inadequacy, a problem that is shared by most of the developing countries. The procedure does not require item‐specific price/unit value data and price index numbers can be calculated from consumer expenditure data grouped by per capita income/total consumer expenditure class in a situation where unit level data are not available. To illustrate the method, we use published state‐specific data of the 50th round (1993–94) and 55th round (1999–2000) consumer expenditure surveys of India's National Sample Survey Organization (NSSO) and calculate the spatial consumer price index numbers for 15 major states of India, with All‐India taken as base, separately for the rural and the urban sector for each round.     

DEMAND THRESHOLD,ZERO EXPENDITURE AND HIERARCHICAL MODEL OF CONSUMER DEMAND

Consumer expenditure surveys often show households reporting zero consumption of some commodities. Three reasons for this are recognized in the literature: (i) infrequency of purchase, (ii) a strong brand preference for differentiated products and (iii) misreporting. However, sometimes the number of households reporting zero consumption is seen to decline with income. To capture this phenomenon, which does not fall into any of the categories mentioned above, we propose a hierarchical preference structure and identify a class of recursive utility functions representing this structure. An empirical illustration based on Indian consumer expenditure data is provided.     

Causality between income and emission: a country group-specific econometric analysis

Empirical studies of the Environmental Kuznets Curve (EKC) examine the presence or otherwise of an inverted U-shaped relationship between the level of pollution and the level of income. Customarily, in the diagram of EKC the level of income is shown on the horizontal axis and that of pollution on the vertical axis. Thus, it is presumed that the relationship between income and pollution is one of unidirectional causality with income causing environmental changes and not vice versa. The validity of this presumption is now being questioned. It is being asserted that the nature and direction of causality may vary from one country to the other. In this paper, we present the results of a study of income–CO₂ emission causality based on a Granger causality test to cross-country panel data on per capita income and the corresponding per capita CO₂ emission data. Briefly, our results indicate three different types of causality relationship holding for different country groups. For the developed country groups of North America and Western Europe (and also for Eastern Europe) the causality is found to run from emission to income. For the country groups of Central and South America, Oceania and Japan causality from income to emission is obtained. Finally, for the country groups of Asia and Africa the causality is found to be bi-directional. The regression equations estimated as part of the Granger causality test further suggest that for the country groups of North America and Western Europe the growth rate of emission has become stationary around a zero mean, and a shock in the growth rate of emission tends to generate a corresponding shock in the growth rate of income. In contrast, for the country groups of Central and South America, Oceania and Japan a shock in the income growth rate is likely to result in a corresponding shock in the growth rate of emission. Finally, causality being bi-directional for the country groups of Asia and Africa, the income and the emission growth rates seemed to reinforce each other.     

Is PMI Useful in Quarterly GDP Growth Forecasts for India? An Exploratory Note

This paper examines the relationship between India’s quarterly overall GDP, manufacturing GDP and services GDP and the corresponding monthly data on overall manufacturing and services PMI for the period January 2006 to July 2014. The objective is to see if the two overall PMIs are related to the level and quarterly growth rate of overall GDP and its chosen components. Considering the quarterly time series nature of the data set, the HEGY equation of Hylleberg et al. (J Econom 44:215–238, 1990) extended by adding the PMI variables as exogenous regressors is used as the regression mode to relate a GDP level/growth rate variable to the two overall PMI variables. The results show that the three GDP level variables, but none of the GDP growth rate variables, have significant positive correlation with services PMI, but not with manufacturing PMI. Finally, the marginal effect of services PMI on manufacturing GDP level is found to be the largest, followed by that for overall GDP level and services GDP level.

     

INTER-OCCUPATION DIFFERENCES IN THE PATTERN OF MONETIZED AND NON-MONETIZED CONSUMER EXPENDITURE IN RURAL INDIA*

This study attempts to examine the inter-occupational differences in the patterns of cash and in-kind expenditure in rural India on the basis of a special tabulation of The National Sample Survey (NSS), 18th round (February 1963-January 1964) consumer expenditure data. The occupational groups considered here are (i) cultivators, (ii) agricultural labourers, (iii) other agriculture, and (iv) non-agricultural occupations. The analysis is carried out primarily in terms of curves relating item-specific cash/kind expenditure to total cash/total kind expenditure for fifteen selected item-groups of expenditure. For each item-occupation combination, four two-parameter forms of Engel curve together with the log-log-inverse form are estimated and the comparisons across occupation groups are made separately on the basis of each of the two-parameter curve forms which were found to give the best fit for at least one occupation group as well as the log-log-inverse form, using analysis of covariance technique. The results indicate that so far as the cash components of item expenditures are concerned, the pattern of expenditure is considerably influenced by occupational factors. It is observed that cultivators have a cash expenditure pattern different from those of agrictural labourers and of households with non-agricultural activities. The comparison of the kind expenditure patterns does not, however, reflect any clear picture primarily because in most cases the itemwise kind expenditure functions could not be estimated satisfactorily. This analysis also suggests that the specification of itemwise cash and kind expenditure functions employed here may not be the most satisfactory ones in an economy with a high degree of non-monetization and therefore alternative specifications need be examined.     

Carbon dioxide emission and income: A temporal analysis of cross-country distributional patterns

This paper explores the relationship between the inter-country income inequality and CO₂ emission and temporal shifts in such a relationship. It also examines how the mean per capita CO₂ emission and its distributional inequality are related to the corresponding mean and the distributional inequality of income. The analysis is based on a cross-country panel data set at the level of country-group. Here environmental damage is treated as a private good and the technique of Lorenz and specific concentration curve analysis have been used as the basic analytical framework to argue that distributional inequality of income should be an explanatory variable in the Environmental Kuznets Curve relationship, along with the mean income level. In the empirical exercise, Johansen's cointegration analysis technique is used to explore existence of statistically significant cointegrating vector(s) relating mean emission and Specific Concentration Ratio of emission to mean income level and Lorenz Ratio of income, using a set of country-group specific time series data set which covers four country-groups (viz., Africa, America, Asia and Europe) and the World as a whole. The empirical results confirm that the inter-country income inequality has significant effect on the mean emission level and inter-country inequality of emission level for most of the country-groups considered.     

A Method of Calculating Regional Consumer Price Differentials with Illustrative Evidence from India

In this paper we propose a method of estimating multilateral regional price index numbers from a given household level data set on item-wise unit values/prices. The method is closely related to the Country-Product Dummy variable model of Summers (1973). This method is likely to be particularly useful in studies of regional comparisons of poverty and inequality, optimal commodity taxes and tax reforms. To illustrate the method, we use it to calculate the regional consumer price index numbers for Eastern, Western and Southern India (taking Northern India as the reference region) separately for three categories of rural and urban households, viz., all households and those below and above the poverty line, using household level unit records of the NSS 50th round (1993–94) Consumer Expenditure Survey.