Abstract
The question of whether certain types of households experience systematically or persistently larger or smaller changes in the price of their market basket gets to the heart of the recently intensified social concern about the distributional impacts of inflation on various groups in the economy—the elderly versus the young, the poor versus the wealthy, and so forth. Although there has been much discussion of this issue, there is surprisingly little evidence on the nature or magnitude of the effect of changes in the price level on the personal distribution of real income [Michael (1979)].
Department of Economics, Clemson University; Southern Methodist University; University of North Texas, and Southern Methodist University, respectively. Maasoumi’s research was supported by the Robert H. and Nancy Dedman Chair in economics which he holds. We thank without implicating the referee and the editor for constructive comments.
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Diamond, C.A., Maasoumi, E., Nieswiadomy, M., Slottje, D.J. (1994). The Effect of Relative Price Changes and Cost of Living Adjustments on Some Welfare Indices. In: Eichhorn, W. (eds) Models and Measurement of Welfare and Inequality. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-79037-9_32
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