How Useful Is CPI Price Data for Spatial Price Adjustment in Poverty Measurement? A Case from Ghana

Policy Research Working Paper 9388, 2020

47 Pages Posted: 28 Oct 2020

Date Written: September 8, 2020

Abstract

Measuring and comparing the levels of household welfare and poverty in a country require cost-of-living differences across regions to be properly adjusted. In measuring the spatial cost of living, the recent literature underscores the importance of detailed product quality information in the price data. Taking advantage of the price data availability in Ghana, this case study explores the Consumer Price Index price data as a source for spatial price measurement. It applies the country product dummy method to the Consumer Price Index price data and compares the results with other methods based on different price data. The empirical analysis indicates a potential bias in estimating spatial prices stemming from the lack of product quality information and, therefore, suggests the potential usefulness of the Consumer Price Index price data for spatial price adjustment in poverty analysis in low- and middle-income countries.

Keywords: Price Indexes, Household Welfare, Purchasing Power Parity, Housing, Ghana

JEL Classification: D12, E31, O15

Suggested Citation

Nakamura, Shohei, How Useful Is CPI Price Data for Spatial Price Adjustment in Poverty Measurement? A Case from Ghana (September 8, 2020). Policy Research Working Paper 9388, 2020, Available at SSRN: https://ssrn.com/abstract=3689327 or http://dx.doi.org/10.2139/ssrn.3689327

Shohei Nakamura (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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