The Insights and Illusions of Consumption Measurements

43 Pages Posted: 14 May 2020

See all articles by Erich Battistin

Erich Battistin

Institute for Fiscal Studies (IFS)

Michele De Nadai

University of Padova

Nandini Krishnan

World Bank

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Abstract

While household well-being derives from long-term average rates of consumption, welfare comparisons typically rely on shorter-duration survey measurements. We develop a new strategy to identify the distribution of these long-term rates by leveraging a large-scale randomization in Iraq that elicited repeated short-duration measurements from diaries and recall questions. Identification stems from diary-recall differences in reports from the same household, does not require reports to be error-free, and hinges on a research design with broad replicability. Our strategy delivers practical and costeffective suggestions for designing survey modules to yield the closest measurements of consumption well-being. In addition, we find little empirical support for the claim that acquisition diaries yield the most accurate measurement of poverty and inequality and offer new insights to interpret and reconcile diary-recall differences in household surveys.

Keywords: modes of data collection, measurement of inequality and poverty, household surveys

JEL Classification: C81, D31, D63, E21, I32

Suggested Citation

Battistin, Erich and De Nadai, Michele and Krishnan, Nandini, The Insights and Illusions of Consumption Measurements. IZA Discussion Paper No. 13222, Available at SSRN: https://ssrn.com/abstract=3596689

Erich Battistin (Contact Author)

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Michele De Nadai

University of Padova ( email )

Nandini Krishnan

World Bank

1818 H Street, NW
Washington, DC 20433
United States

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