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Relative price shifts, economies of scale and poverty during economic transition

Citation

Lanjouw, Jean O.; Lanjouw, Peter; Milanovic, Branko; & Paternostro, Stefano (2004). Relative price shifts, economies of scale and poverty during economic transition. Economics of Transition, 12(3), 509-536.

Abstract

Economic transition is associated with significant shifts in relative prices between private and public goods. If, as a result, public goods claim a larger share of total expenditures, economies of scale in consumption increase. We show how relative price changes might alter the welfare of different-sized households in the short run and over time. We illustrate, for a selection of transition economies, that conventional poverty profiles are quite sensitive to assumptions made about economies of scale in consumption. In particular, the common view that large households with many children are poor relative to small households (such as those comprising the elderly) is shown to be highly non-robust.

URL

http://dx.doi.org/10.1111/j.0967-0750.2004.00191.x

Reference Type

Journal Article

Year Published

2004

Journal Title

Economics of Transition

Author(s)

Lanjouw, Jean O.
Lanjouw, Peter
Milanovic, Branko
Paternostro, Stefano