David Atkin, MIT on A New Engel on the Gains from Trade. Measuring the gains from trade and their distribution is challenging. Recent empirical contributions have addressed this challenge by drawing on rich and newly available sources of microdata to measure changes in household nominal incomes and price indices. While such data have become available for some components of household welfare, and for some locations and periods, they are typically not available for the entire consumption basket. In this paper, we propose and implement an alternative approach that uses rich, but widely available, expenditure survey microdata to estimate theory-consistent changes in income-group specific price indices and welfare. Our approach builds on existing work that uses linear Engel curves and changes in expenditure on income-elastic goods to infer unobserved real incomes. A major shortcoming of this approach is that while based on non-homothetic preferences, the price indices it recovers are homothetic and hence are neither theory consistent nor suitable for distributional analysis when relative prices are changing. To make progress, we show that we can recover changes in income-specific price indices and welfare from horizontal shifts in Engel curves if preferences are quasi-separable (Gorman, 1970; 1976) and we focus on what we term “relative Engel curves”. Our approach is flexible enough to allow for the highly non-linear Engel curves we document in the data, and for non-parametric estimation at each point of the income distribution. We first implement this approach to estimate changes in cost of living and household welfare using Indian microdata. We then revisit the impacts of India’s trade reforms across regions.
Join EPI's scholars at 27 roundtables, panels and poster sessions, and help us to celebrate Susan Dynarski's selection as the recipient of APPAM's Spencer Award for transformative work in education policy research.
U. S. Department of the Treasury, Cash Room
Washington, DC
The U.S. Office of Financial Research and the University of Michigan’s Center on Finance, Law, and Policy will bring together regulators, policymakers, lawyers, economists, financial institutions, investors, financial technology companies, and experts on data science, cybersecurity, and finance.
Economic Development Seminar presents Supreet Kaur (UC-Berkeley). Supreet will present "Scabs: The Social Suppression of Labor Supply" in the joint labor/development seminar on Friday, April 6, 1-2:30PM in Lorch 201.
Saumitra Jha, Stanford University will present Swords into Bank Shares: Financial Innovations and Innovators in Mitigating Political Violence in EDS Seminar on Tuesday, April 10 at 2:30pm in 201 Lorch Hall.
This talk will show how children’s chances of climbing the income ladder vary across neighborhoods, analyze the sources of racial disparities in intergenerational mobility, and discuss the role of higher education in creating greater income mobility.
Please join Professor Susan Collins, the Ford School DE&I Officer, Stephanie Sanders and Global Engagement Program Manager, Cliff Martin for an info session about this exciting opportunity in global engagement.
Indo-Pacific Conference organized by International Policy Center and Center for Japanese Studies features a keynote by Susan Thornton, Assistant Secretary of State for East Asian and Pacific Affairs.
Causal Inference in Education Research Seminar (CIERS)
Susan Dynarski, co-director of Education Policy Initiative and Professor of Public Policy, Education and Economics at the University of Michigan, will be a featured presenter at TEDx Indianapolis. The Education Policy Initiative will host a viewing party of her livestreamed presentation. Snacks and drinks provided.
The Center on Finance, Law & Policy at the University of Michigan is an interdisciplinary research center which draws together faculty and students from more than a dozen of Michigan’s nineteen schools and colleges to work on a broad range of...
The management of financial resources to achieve public goals pervades every area of public policy, but budgeting and financial management is an area usually left to “experts” who often seem to speak their own language. In today’s...
This course surveys what we do and don't know about economic growth and poverty alleviation in developing countries. We begin by discussing alternative perspectives on the goals of...
