Research & Projects

Project 1

Estimating CPI bias using Engel Curve for the Elderly

Abstract

This paper estimates bias in the Consumer Price Index (CPI) for elderly individuals in the United States using Engel curve methodology and household-level data from the Panel Study of Income Dynamics (1999–2023). The analysis focuses on how well the CPI reflects changes in the cost of living for older Americans, with particular attention to differences by gender and marital status. Results show that from 1999–2007, the CPI overstated the increase in the cost of living for both elderly and non-elderly households. In contrast, from 2007–2023, the CPI understated cost increases, with the bias generally larger for non-elderly households. Within the elderly group from 2007-2023, the CPI understated the annual rate of increase in the cost of living for married individuals and overstated the annual rate of increase in the cost of living for singles but is statistically insignificant. From 2007-2003, CPI understated the annual rate of increase in the cost of living for male elderly and overstated the annual rate of increase in the cost of living for females but is statistically insignificant. These findings highlight the variation in CPI bias across demographic groups and time periods, with implications for inflation-indexed programs such as Social Security. By identifying these discrepancies, the study contributes to a better understanding of how inflation affects different segments of the population and informs policy efforts aimed at improving the accuracy of cost-of-living adjustments.

JobMarketPaperAudertaAmoako.pdf

Project 2

Maternal Employment and Overweight Children

Abstract

This study examines the relationship between maternal employment and childhood overweight using recent waves (2014, 2019, 2021) of the Child Development Supplement of the Panel Study of Income Dynamics. The analytic sample includes 3,404 children aged 3 to 17 linked to their primary caregiver specifically the mother,step mother or foster mother. The analysis focuses on the effect of maternal weekly work hours, accounting for potential endogeneity with state-level unemployment rates as instruments. To capture heterogeneity across households, the study applies a semiparametric partially linear varying coefficient model, allowing the effect of maternal work hours to vary by family income. Preliminary results indicate that longer maternal work hours significantly increase the probability of a child being overweight, though this effect diminishes in higher-income households. Additional findings highlight the strong influence of maternal obesity, family size, and child health status. By incorporating flexible methods and updated longitudinal data, the study provides new evidence on how maternal labor supply interacts with socioeconomic resources to shape child health outcomes, offering implications for policies that support work-family balance and interventions to reduce childhood obesity.

Project 3

Estimating CPI bias using Semiparametric Engel Curves

Objectives

This paper examines Consumer Price Index (CPI) bias using Engel curves and a semiparametric partially linear single-index panel model with household fixed effects. The approach flexibly models nonlinear relationships between food budget shares and expenditure while controlling for unobserved heterogeneity, estimated via SMAVE. Using PSID data from 1999–2023, the analysis focuses on elderly households and reports subgroup estimates by gender and marital status. The single-index structure mitigates the curse of dimensionality and accommodates curvature in Engel relationships that standard parametric specifications often miss, improving the reliability of inferred cost-of-living trends. By producing demographic-specific CPI bias estimates, the study highlights how differences in consumption patterns—particularly in categories such as health care and housing—can yield inflation experiences that diverge from headline measures. The findings have direct implications for indexation practices affecting Social Security, pensions, and other benefits tied to the CPI, and underscore the importance of flexible demand systems when benchmarking cost-of-living changes for older Americans.

Page updated

Report abuse