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- Title
The Measurement and Interpretation of Real Consumption and Purchasing Power Parity for a Quantity-constrained Economy: The Case of East and West Germany.
- Authors
Collier Jr., Irwin L.
- Abstract
When households are subject to quantity constraints, conventional measures of real consumption and purchasing power parity for cross-national comparisons suffer from a new type of index number problem. Additional information on preferences taken from a demand system estimated for a similar economy without quantity constraints can be employed to calculate distance function and money-metric indexes of relative real consumption and corresponding measures of purchasing power parity. The procedure is illustrated in a comparison of East and West German consumer prices and consumption expenditures for 1977.
- Subjects
CONSUMPTION (Economics); PURCHASING power parity; PURCHASING power; COST of living; REAL wages; INCOME
- Publication
Economica, 1989, Vol 56, Issue 221, p109
- ISSN
0013-0427
- Publication type
Article
- DOI
10.2307/2554499