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Output, prices, and the distribution of consumption in rural India
Author(s) -
Bell Clive,
Klonner Stefan
Publication year - 2005
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.2005.00240.x
Subject(s) - economics , stochastic dominance , econometrics , consumption (sociology) , dominance (genetics) , estimator , consumption smoothing , distribution (mathematics) , simultaneity , inequality , mathematics , statistics , unemployment , macroeconomics , sociology , gene , mathematical analysis , social science , biochemistry , chemistry , physics , classical mechanics
This article analyzes the relation among agricultural output, inflation, and the distribution of consumption in rural India, using both the Singh–Maddala and Dagum families to model the entire distribution parametrically. Employing a benchmark case in which growth is distributionally neutral and idiosyncratic shocks are completely smoothed, and using a GMM‐estimator to deal with potential simultaneity between output and consumption, we conclude that: (i) growth was not distributionally neutral; (ii) good harvests (relative to trend) yielded improvements according to first‐order stochastic dominance; (iii) slow growth before 1980 went with decreasing inequality; (iv) accelerated growth thereafter tended to increase inequality, though yielding improvements according to first‐order stochastic dominance; (v) consumption smoothing was incomplete.