Replication data for: International Income Inequality: Measuring PPP Bias by Estimating Engel Curves for Food

Principal Investigator(s): View help for Principal Investigator(s) Ingvild Almås

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Project Citation:

Almås, Ingvild. Replication data for: International Income Inequality: Measuring PPP Bias by Estimating Engel Curves for Food. Nashville, TN: American Economic Association [publisher], 2012. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-11. https://doi.org/10.3886/E112507V1

Project Description

Summary: Purchasing power-adjusted incomes applied in cross-country comparisons are measured with bias. This paper estimates the purchasing power parity (PPP) bias in Penn World Table incomes and provides corrected incomes. The bias is substantial and systematic: the poorer a country, the more its income tends to be overestimated. Consequently, international income inequality is substantially underestimated. The methodological contribution is to exploit the analogies between PPP bias and the bias in consumer price index (CPI) numbers. The PPP bias and subsequent corrected incomes are measured by estimating Engel curves for food, an established method of measuring CPI bias. (JEL C43, D31, E31, O11, O12)

Scope of Project

JEL Classification:
      C43 Index Numbers and Aggregation; Leading indicators
      D31 Personal Income, Wealth, and Their Distributions
      E31 Price Level; Inflation; Deflation
      O11 Macroeconomic Analyses of Economic Development
      O12 Microeconomic Analyses of Economic Development

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Published Versions

V1 [2019-10-11]

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