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A Method of Calculating Regional Consumer Price Differentials with Illustrative Evidence from India
Author(s) -
Coondoo D.,
Majumder A.,
Ray R.
Publication year - 2004
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.0034-6586.2004.00111.x
Subject(s) - economics , commodity , consumer price index (south africa) , unit (ring theory) , poverty , index (typography) , price index , engel curve , variable (mathematics) , econometrics , product (mathematics) , inequality , agricultural economics , macroeconomics , mathematics , economic growth , monetary policy , mathematical analysis , mathematics education , geometry , world wide web , computer science , market economy
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.