Distribution of Household Expenditure
- 980 Downloads
In this chapter we use consumption expenditure data to measure household welfare. These data are preferred to income data for traditional reasons—less measurement error, greater accuracy and less seasonality effect. However, income and consumption expenditure are highly correlated and consumption expenditure is a good indicator of welfare status. The structure of household consumption expenditure can be used to characterize households by describing the level of food and non-food expenditure. The measurement will give some indication of the probable impact of price variation on household purchasing power. It is expected that expenditure, especially on food, is the most significant part of spending by the poor and it varies widely with the variations of economic and socio-demographic conditions.