Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/51981 
Year of Publication: 
2011
Series/Report no.: 
IZA Discussion Papers No. 5717
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
This paper provides a single welfare measure to show the effects of consumer price changes upon households in Ireland between 1999 and 2010. This measure combines an efficiency component using a Linear Expenditure System (LES) and an equity component using the Atkinson Social Welfare Function. The efficiency component includes the behavioural response to price changes for non-subsistence expenditures thereby producing a Cost of Living Index. The Atkinson Index of Inequality produces an inequality measure and this is combined with the Cost of Living Index to produce an overall welfare measure. This extends upon the existing Irish literature on this issue by accounting for this broader set of components. The results show that changes in the cost of living have differed substantially between households both in terms of demographics and the position of the household in the income distribution and that behavioural response can potentially improve the welfare position of households in response to price changes in most years.
Subjects: 
price
inflation
equivalent income
welfare
linear expenditure system
consumer price index
distribution
compensating variation
inequality aversion
JEL: 
D12
D31
D63
E31
P46
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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