Sankhya: The Indian Journal of Statistics

1995, Volume 57, Series B, Pt. 3, pp. 433--449

EFFECT OF REFERENCE PERIOD ON ENGEL ELASTICITIES OF CLOTHING AND OTHER ITEMS : FURTHER RESULTS

By

SUCHISMITA GHOSE and NIKHILESH BHATTACHARYA, Indian Statistical Institute

SUMMARY. This paper analyses Indian NSS household budget data with a view to examining the effect of the reference period used for data collection on the estimates of engel elasticities. NSS generally uses the 'last month' reference period, and so seasonal and other short-run factors may bias the estimates obtained from such data. Analysis of data from different NSS rounds showed that the elasticities for clothing and several other items decline dramatically when available 'last year' data for these items are used in place of corresponding 'last month' data. These results highlight the need of special methods of estimating engel elasticities from budget data relating to short references periods like 'last month' or 'last week'.

AMS (1980) subject classification.  62P20, 62D05.

Key words and phrases. NSS household budget data, estimation of engel elasticities, reference period in household budget enquiries.

Full paper (PDF).