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Are Unit Values Reliable Proxies for Prices? Implications of Better Price Data for Household Consumption Measurement in a Low-Income Context

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dc.contributor.authorAlimi, Omoniyi Babatunde
dc.contributor.authorVundru, Wilbert Drazi
dc.contributor.authorKilic, Talip
dc.date.accessioned2024-02-13T14:37:20Z
dc.date.available2024-02-13T14:37:20Z
dc.date.issued2024-02-08
dc.description.abstractHousehold Consumption and Expenditure Surveys are key to consumption-based monetary poverty measurement. In the absence of market price surveys that are linked to Household Consumption and Expenditure Surveys, unit values are used as proxies for market prices in estimating nominal consumption aggregates, price deflators, poverty lines, and poverty statistics. This practice relies on the Hicksian separability assumption: within-commodity group relative prices are constant across space and the price of a single good is an accurate proxy for the commodity group price. To test, for the first time in a low-income context, whether Hicksian separability holds, this paper uses the price data collected for an extensive list of food items, including several variety/quality-differentiated products for specific items, in a national market survey that was conducted in Malawi in sync with the Household Consumption and Expenditure Survey that is the source of official poverty statistics. The analysis demonstrates that Hicksian separability fails to hold across space and time and that unit values are biased proxies for prices. Integrating the Household Consumption and Expenditure Survey and market survey data based on location and timing of fieldwork permits an assessment of consumption and poverty estimation based on market prices versus unit values. Relative to unit values, using market prices leads to higher food and overall consumption expenditures—both in nominal and real terms—while generating higher poverty lines and higher food and overall poverty rates. Compared to their counterparts based on unit values, spatially-disaggregated poverty estimates based on market prices exhibit a stronger correlation with nightlights —an objective proxy for living standards.en
dc.identifierhttp://documents.worldbank.org/curated/en/099523402082423712/IDU1ca3149d119ea014c5c1a1f7114388f64a05e
dc.identifier.doi10.1596/1813-9450-10698
dc.identifier.urihttps://openknowledge.worldbank.org/handle/10986/41047
dc.languageEnglish
dc.publisherWashington, DC: World Bank
dc.relation.ispartofseriesPolicy Research Working Paper; 10698
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by/3.0/igo/
dc.subjectHOUSEHOLD SURVEY
dc.subjectHOUSEHOLD CONSUMPTION AND EXPENDITURE
dc.subjectUNIT VALUES
dc.subjectNOMINAL CONSUMPTION AGGREGATE
dc.subjectSEPARABILITY ASSUMPTION
dc.subjectPOVERTY LINE
dc.subjectCOMMODITY GROUP PRICE
dc.titleAre Unit Values Reliable Proxies for Prices? Implications of Better Price Data for Household Consumption Measurement in a Low-Income Contexten
dspace.entity.typePublication
okr.associatedcontenthttps://reproducibility.worldbank.org/index.php/catalog/125 Link to reproducibility package
okr.crossref.titleAre Unit Values Reliable Proxies for Prices? Implications of Better Price Data for Household Consumption Measurement in a Low-Income Context
okr.date.disclosure2024-02-08
okr.date.doiregistration2025-04-09T02:49:40.725052Z
okr.date.lastmodified2024-02-08T00:00:00Zen
okr.doctypePolicy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099523402082423712/IDU1ca3149d119ea014c5c1a1f7114388f64a05e
okr.guid099523402082423712
okr.identifier.docmidIDU-ca3149d1-9ea0-4c5c-a1f7-14388f64a05e
okr.identifier.doi10.1596/1813-9450-10698
okr.identifier.doihttp://dx.doi.org/10.1596/1813-9450-10698
okr.identifier.externaldocumentum34254581
okr.identifier.internaldocumentum34254581
okr.identifier.reportWPS10698
okr.import.id3149
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099523402082423712/pdf/IDU1ca3149d119ea014c5c1a1f7114388f64a05e.pdfen
okr.region.administrativeAfrica Eastern and Southern (AFE)
okr.region.countryMalawi
okr.topicPoverty Reduction::Poverty Monitoring & Analysis
okr.topicMacroeconomics and Economic Growth::Markets and Market Access
okr.unitDevelopment Data Group (DECDG)
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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