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Prices, Unit Values and Local Measurement Units in Rural Surveys: an Econometric Approach with an Application to Poverty Measurement in Ethiopia

Author

Listed:
  • Bart Capéau
  • Stefan Dercon
Abstract
For many research problems in developing countries, some information on prices faced by households is required, for example if subsistence consumption is a substantial part of consumption. These prices are not readily available from household surveys, and at times they are not easily observed, for example if markets are thin and systematic price information can only be observed from markets some distance away from communities. 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, using data from rural Ethiopia to illustrate the approach. In an application, we show that the conclusions about poverty changes over time are significantly affected by using alternative strategies to convert local units and to value subsistence consumption. We find in our case 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 give slightly lower values than our estimates.

Suggested Citation

  • Bart Capéau & Stefan Dercon, 1998. "Prices, Unit Values and Local Measurement Units in Rural Surveys: an Econometric Approach with an Application to Poverty Measurement in Ethiopia," Working Papers of Department of Economics, Leuven ces9818, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    • Handle: RePEc:ete:ceswps:ces9818
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    References listed on IDEAS

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    1. Angus Deaton, 1991. "Price Elasticities from Survey Data: Extensions and Indonesian Results," International Economic Association Series, in: Marc Nerlove (ed.), Issues in Contemporary Economics, chapter 10, pages 253-283, Palgrave Macmillan.
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    Cited by:

    1. Bai, Yan & Costlow, Leah & Ebel, Alissa & Laves, Sarah & Ueda, Yurika & Volin, Natalie & Zamek, Maya & Herforth, Anna & Masters, William A., 2021. "Review: Retail consumer price data reveal gaps and opportunities to monitor food systems for nutrition," Food Policy, Elsevier, vol. 104(C).
    2. Ole Boysen, 2016. "Food Demand Characteristics in Uganda: Estimation and Policy Relevance," South African Journal of Economics, Economic Society of South Africa, vol. 84(2), pages 260-293, June.
    3. Kidane Assefa Abebe & Deyi Zhou & Bekele Gebisa Etea & Fekadu Megersa Senbeta & Dereje Kebebew Debeli & Rajani Osti, 2018. "Cereal Commodity Trading in Ethiopian Local Marketplace: Examining Farmers’ Quantity Measurement Behaviors," Agriculture, MDPI, vol. 8(12), pages 1-15, December.
    4. De Weerdt, Joachim & Beegle, Kathleen & Friedman, Jed & Gibson, John, 2014. "The challenge of measuring hunger," Policy Research Working Paper Series 6736, The World Bank.
    5. Florence Kondylis, 2008. "Agricultural Outputs and Conflict Displacement: Evidence from a Policy Intervention in Rwanda," Economic Development and Cultural Change, University of Chicago Press, vol. 57(1), pages 31-66, October.
    6. Matthias Kalkuhl & Lukas Kornher & Marta Kozicka & Pierre Boulanger & Maximo Torero, 2013. "Conceptual framework on price volatility and its impact on food and nutrition security in the short term," FOODSECURE Working papers 15, LEI Wageningen UR.
    7. Beegle, Kathleen & De Weerdt, Joachim & Friedman, Jed & Gibson, John, 2012. "Methods of household consumption measurement through surveys: Experimental results from Tanzania," Journal of Development Economics, Elsevier, vol. 98(1), pages 3-18.
    8. Florence Kondylis, 2005. "Agricultural Returns and Conflict: Quasi-Experimental Evidence from a Policy Intervention Programme in Rwanda," CEP Discussion Papers dp0709, Centre for Economic Performance, LSE.
    9. François Gardes & Noël Thiombiano, 2017. "The value of time and expenditures of rural households in Burkina Faso: a domestic production framework," Documents de travail du Centre d'Economie de la Sorbonne 17027, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    10. Kidane Assefa Abebe & Deyi Zhou & Bekele Gebisa Etea & Dessalegn Anshiso Sedebo & Neway Habtemariam Muktar & Dano Endalu Olana, 2019. "Quantity Measurement Cost and Reliability of Cereal Commodity Trade: Evidence from Ethiopia," Sustainability, MDPI, vol. 11(6), pages 1-25, March.
    11. François Gardes & Noël Thiombiano, 2017. "The value of time and expenditures of rural households in Burkina Faso: a domestic production framework," Post-Print halshs-01535172, HAL.
    12. Caeyers, Bet & Chalmers, Neil & De Weerdt, Joachim, 2012. "Improving consumption measurement and other survey data through CAPI: Evidence from a randomized experiment," Journal of Development Economics, Elsevier, vol. 98(1), pages 19-33.
    13. Gelaw, Fekadu, 2013. "Inefficiency and Incapability Gaps as Causes of Poverty: A Poverty Line-Augmented Efficiency Analysis Using Stochastic Distance Function," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 8(2), pages 1-45, August.
    14. repec:lic:licosd:36515 is not listed on IDEAS
    15. Xin Meng & Robert G. Gregory & Guanghua Wan, 2006. "China Urban Poverty and its Contributing Factors, 1986-2000," WIDER Working Paper Series RP2006-133, World Institute for Development Economic Research (UNU-WIDER).
    16. Vincent Leyaro & Oliver Morrissey & Trudy Owens, 2010. "Food prices, tax reforms and consumer Welfare in Tanzania 1991–2007," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 17(4), pages 430-450, August.
    17. Abuelhaj, Tareq & Gassmann, Franziska & O'Donoghue, Cathal, 2018. "Price opinion data in subsidized economies: Empirical evidence from Iraq," MERIT Working Papers 2018-033, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    18. François Gardes & Noël Thiombiano, 2017. "The value of time and expenditures of rural households in Burkina Faso: a domestic production framework," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01535172, HAL.
    19. Ole Boysen, 2009. "Border Price Shocks, Spatial Price Variation, and their Impacts on Poverty in Uganda," The Institute for International Integration Studies Discussion Paper Series iiisdp306, IIIS.
    20. van den Boom,Bart & Halsema,Alex & Molini,Vasco, 2015. "Are we confusing poverty with preferences ?," Policy Research Working Paper Series 7247, The World Bank.

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    More about this item

    Keywords

    household surveys; unit values; subsistence consumption; local measurement units; poverty;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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