How reliable are household expenditures as a proxy for permanent income? Implications for the income–nutrition relationship

Gibson, John; Kim, Bonggeun

How reliable are household expenditures as a proxy for permanent income? Implications for the income–nutrition relationship

2013

Gibson, John | Kim, Bonggeun

Using short-run expenditures from household surveys as a proxy may create attenuated estimates of the impact of permanent income on economic outcomes. We use repeated observations to calculate reliability ratios and estimate errors in variables regressions of the impact of income on nutrition. We find significant responses to income, in contrast to previous influential studies.

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