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Print version ISSN 0120-4483


LASSO VALDERRAMA, Francisco Javier. Impact of Relative Price Shif ts on Poverty and Inequality in Colombia: 1998-2007. Ens. polit. econ. [online]. 2008, vol.26, n.57, pp.176-249. ISSN 0120-4483.

Based on the estimation of plutocratic and democratic price indexes for Colombia, through individual inflation, I found evidence of the anti-poor effect of relative price shifts occurred between December 1998 and December 2007 and its regressivity with respect to income distribution. In 2001, 2002 and 2007 where the annual increases in food prices were above the national average, the inflation was regressive with regard to the income distribution. On the contrary, in 2000 and 2003 food inflation was below the national level and was progressive with regard to income distribution. On average, an increase of 3.5% in food prices, keeping other prices constant, national inflation increases by 1%, generating an increase of 0.62 percentage points in poverty and 0.14 percentage points in extreme poverty. In relative terms, extreme poverty increases by 2.9% while poverty only reaches 1.6%.

Keywords : Index numbers and aggregation; Plutocratic index; Democratic index; Income distribution; Inequality; Poverty; Inflation.

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