Date of Submission


Date of Award


Institute Name (Publisher)

Indian Statistical Institute

Document Type

Doctoral Thesis

Degree Name

Doctor of Philosophy

Subject Name

Quantitative Economics


Economics and Planning Unit (EPU-Delhi)


Ramaswami, Bharat (EPU-Delhi; ISI)

Abstract (Summary of the Work)

The measurement of welfare forms the foundation of public policy analysis. It is an area where empirical investigations clearly benefits from theoretical insight and where theoretical concepts are brought alive and appropriately focused by the discipline of empirical relevance and policy design. While welfare measurement at the micro level is of independent interest, of greater concern is the well-being of groups of households/individuals.A widely discussed issue in the literature of welfare economics is ‘whose welfare to measure’ when we are interested to measure the well-being of a group of individuals. The most common approach is to assume the existence of a representative agent. But sometimes this approach turns out to be unappealing due to distributional issues which are usually ignored under the representative agent framework. An alternative approach is to aggregate the welfare of individuals/households belong to a group. The aggregation as proposed by the literature can be done in various ways (Pollak, 1980).The second chapter of my dissertation is a theoretical analysis on the issue of aggregation of individual welfare. This chapter investigates the impact of within group heterogeneity in budget share on aggregate/group cost of living index. A cost of living index is a measure of change in welfare when price changes. Although the theory of cost of living indices has been developed for individual welfare, policy interest and practical questions have invariably been Chapter1: Introduction and Main Results 2 concerned with group cost of living indices as a measure of changes in the welfare of that group. The important finding of this chapter is that heterogeneity in the distribution of budget share matters for group cost of living index. Even if two groups are identical in all other dimensions, the group cost of living index will be non-identical as the variability in budget share differs between two groups. Another principal finding of this chapter is that the impact of heterogeneity varies with the change in relative prices. Our results bear interesting relation to the ‘representative consumer’ literature. Statistical agencies that use average budget share to construct group cost of living index implicitly assumes no heterogeneity and the resulting bias is captured by our methods.In applied welfare economics, we are typically interested in comparing the change in welfare across groups. A nice example is to consider the spatial variation in the welfare change due to any economic shock or public policy change. The third chapter of my thesis is in that direction. This chapter is an econometric evaluation of spatial impacts on prices and on wages, of India’s trade liberalization in edible oils that began in the early 1990s. This chapter examines that how the impact varies across regions-especially in the regions close to ports relative to those in the hinterland and also in the high oilseeds producing regions relative to low oilseeds producing regions.


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Creative Commons Attribution 4.0 International License
This work is licensed under a Creative Commons Attribution 4.0 International License.


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