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Subject: Consumption inequality ×

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    Examining the contribution of household attributes and locality on household welfare inequality: a regression-based decomposition approach
    (2009-11) Ambrocio, Deah S.; Balajadia, Regina Bianca L.
    This study focuses on examining the sources of per capita expenditure inequality in the Philippines using the Family Income· and Expenditure Survey data for 2000 and 2006. To be able to see the share of inequality caused by differences in endowments between regions and within regions from the national-level measure, decomposition of the inequality index Theil T was undertaken. For a more in-depth analysis on the sources of inequality and to be able to see the relationship of locality and various household characteristics to household welfare measured by the log of per capita expenditure, regression runs were performed. Regression-based decomposition techniques were also done to see further how much of the total inequality is due to variations in geographical location and household characteristics. The inequality in the living standards faced by Filipinos appears to be caused by within-group components contrary to the widespread view that it is caused by differences in endowments between regions. Hence, the results imply that poverty reduction policies should create conditions that will lessen welfare disparities within regions. Household head characteristics specifically, educational attainment has emerged to be the highest contributor in the variance explained by the model. Likewise, the head's employment sector turned out to be a significant source of variation. Agriculture remained to be the poorest sector. Household composition factors also played an important source accounting to almost a quarter of explained variation. Location is found to account for a substantial share of variance but still not as high as the share appropriated by household attributes.
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    A decomposition analysis of changes in consumption inequality and the role of population dynamics in the Philippines from 1985-2003
    (2009-11) Alegado, Antonio Siegfrid O.; Destacamento, Jenny M.; Esguerra, Emmanuel
    Evidence shows that the population structure of the Philippines is changing due to the average decrease in population growth rate attributed to the expansion of life expectancy at birth in the country. Studies have shown greater longevity, ceteris paribus, results in the increase in the population share of the elderly in a country. Following the methodology by Deaton and Paxson (1994), this paper uses the variance of the logarithm of total household expenditures and expenditures on human capital formation goods, taken from rounds of Family Income and Expenditures Survey (FIES) from 1985 to 2003, to measure inequality across and between cohorts. The results show that the changing demographic structure in the Philippines contributes to the increase in the inequality of overall consumption, ceteris paribus, because the consumption of the elderly population is more unequal than that of the young. Moreover, it is found that on the average inequality in consumption of human capital formation goods increases with age.