The Effect of Relative Price Changes on Income Distribution
Supportive policies that lead to significant relative price changes have widespread impact on income distribution that cannot be considered by adjusting expenditures with the consumer price index. While households have different consumption patterns in different income deciles, the Consumer Price In...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | fas |
| Published: |
Allameh Tabataba'i University Press
2018-12-01
|
| Series: | Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī |
| Subjects: | |
| Online Access: | https://joer.atu.ac.ir/article_9827_3d9a2f7eddd82d0f837514fc59a51445.pdf |
| _version_ | 1797375655360331776 |
|---|---|
| author | soheila parvin mahnoosh abdollah milani Vahid Rezaei |
| author_facet | soheila parvin mahnoosh abdollah milani Vahid Rezaei |
| author_sort | soheila parvin |
| collection | DOAJ |
| description | Supportive policies that lead to significant relative price changes have widespread impact on income distribution that cannot be considered by adjusting expenditures with the consumer price index. While households have different consumption patterns in different income deciles, the Consumer Price Index (CPI) measures changes in prices based on the pattern of consumption in the average-income households. To overcome the issue, this paper examines the impact of relative price changes on distribution of real income (real expenditure) based on the HSPI Index, which is calculated using the weights of goods in each household’s basket. The period under study is 2007-2015. To measure inequality, the Gini coefficient is used based on Ogwang method. The results show that in periods that price of foods increase more than other categories, income inequality is the more when calculated, respectively, based on Household Specific Price Index (HSPI) and Consumer Price Index (CPI) than Gini coefficient based on nominal expenditures. Because of higher share of foods in consumption basket of low-income households, higher relative price of this category leads to worsening of income distribution and loss of welfare for low-income class. |
| first_indexed | 2024-03-08T19:27:34Z |
| format | Article |
| id | doaj.art-6c6adb166fb6481aaad1143e77c44312 |
| institution | Directory Open Access Journal |
| issn | 1735-210X 2476-6453 |
| language | fas |
| last_indexed | 2024-03-08T19:27:34Z |
| publishDate | 2018-12-01 |
| publisher | Allameh Tabataba'i University Press |
| record_format | Article |
| series | Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī |
| spelling | doaj.art-6c6adb166fb6481aaad1143e77c443122023-12-26T08:03:10ZfasAllameh Tabataba'i University PressFaslnāmah-i Pizhūhish/Nāmah-i Iqtisādī1735-210X2476-64532018-12-01187111910.22054/joer.2018.98279827The Effect of Relative Price Changes on Income Distributionsoheila parvin0mahnoosh abdollah milani1Vahid Rezaei2Professor, Faculty of Economics, Allameh Tabataba'i University, TehranAssociate Pprofessor, Faculty of Economics, Allameh Tabataba'i University, TehranMaster's Student in Economics, Faculty of Economics, Allameh Tabataba'i University, TehranSupportive policies that lead to significant relative price changes have widespread impact on income distribution that cannot be considered by adjusting expenditures with the consumer price index. While households have different consumption patterns in different income deciles, the Consumer Price Index (CPI) measures changes in prices based on the pattern of consumption in the average-income households. To overcome the issue, this paper examines the impact of relative price changes on distribution of real income (real expenditure) based on the HSPI Index, which is calculated using the weights of goods in each household’s basket. The period under study is 2007-2015. To measure inequality, the Gini coefficient is used based on Ogwang method. The results show that in periods that price of foods increase more than other categories, income inequality is the more when calculated, respectively, based on Household Specific Price Index (HSPI) and Consumer Price Index (CPI) than Gini coefficient based on nominal expenditures. Because of higher share of foods in consumption basket of low-income households, higher relative price of this category leads to worsening of income distribution and loss of welfare for low-income class.https://joer.atu.ac.ir/article_9827_3d9a2f7eddd82d0f837514fc59a51445.pdfinequalityspecial household price indexinflation |
| spellingShingle | soheila parvin mahnoosh abdollah milani Vahid Rezaei The Effect of Relative Price Changes on Income Distribution Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī inequality special household price index inflation |
| title | The Effect of Relative Price Changes on Income Distribution |
| title_full | The Effect of Relative Price Changes on Income Distribution |
| title_fullStr | The Effect of Relative Price Changes on Income Distribution |
| title_full_unstemmed | The Effect of Relative Price Changes on Income Distribution |
| title_short | The Effect of Relative Price Changes on Income Distribution |
| title_sort | effect of relative price changes on income distribution |
| topic | inequality special household price index inflation |
| url | https://joer.atu.ac.ir/article_9827_3d9a2f7eddd82d0f837514fc59a51445.pdf |
| work_keys_str_mv | AT soheilaparvin theeffectofrelativepricechangesonincomedistribution AT mahnooshabdollahmilani theeffectofrelativepricechangesonincomedistribution AT vahidrezaei theeffectofrelativepricechangesonincomedistribution AT soheilaparvin effectofrelativepricechangesonincomedistribution AT mahnooshabdollahmilani effectofrelativepricechangesonincomedistribution AT vahidrezaei effectofrelativepricechangesonincomedistribution |