No abstract

For many research problems in developing countries, some information on prices faced by households is required for the analysis, for example if subsistence consumption is a substantial part of consumption. These prices are not readily available from household surveys, nor is it straightforward to observe them. Furthermore, quantities consumed and produced are often in local units presenting further problems for the analysis. We provide an econometric approach to estimate prices and quantity conversion factors from household expenditure data. We use panel data from rural Ethiopia to illustrate the approach and to investigate the potential exogenous quality bias in the estimation of the prices. In an application, we show that the conclusions about poverty changes over time are significantly affected by using less appropriate strategies to convert local units and to value subsistence consumption. We find that mean unit values result in the overestimation of prices due to outliers and other sources of measurement error. Exogenous consumer price sources, often collected at larger markets outside the village, tend to be slightly lower than our estimates.

We present the Random Utility Random Opportunity (ruro) model of job choice (Aaberge, Dagsvik and Strøm, 1995, and Aaberge, Colombino and Strøm, 1999) and report estimation results from an application of a version of that model on Belgian data (eu-silc 2007). We discuss the effect of education level on the intensity of preference for leisure relative to consumption, on the intensity of job offers, and on the wage offer distribution. Finally, we report simulation results with respect to the impact on labour market participation by letting the male catch up the arrears in educational attainment they currently have with respect to females.

We analyse the distributional impact of lowering social security contributions and compensating the revenue loss by an increase in indirect taxes. We empirically assess the distributional consequences of this shift by using two Belgian microsimulation models: modété for the tax benefit system, and aster for the indirect tax part. Since the underlying micro database of the tax benefit system does not contain expenditures, we first impute detailed expenditures in the income data survey, by means of semiparametric Engelcurves.The currently living generation of pensioners belongs to the losers by such a reform: They do not profit from the reduced tax on labour income, but pay higher consumption prices. Less obvious, also part of the working population loses. Even not all those who leave unemployment after the reform are gainers.We also investigate the sensitivity of the results w.r.t. the choice of welfare measure to assess the combined change in disposable income, consumer prices and -in the case of flexible labour supply -leisure. We show how the specific choice and parameters of the welfare measure will influence the conclusions, possibly even more than the predictive model for assessing the behavioural reactions in labour supply.