Estimation of Unit Values in Household Expenditure Surveys without Quantity Information

Abstract

In this article, we present the pseudounit command, which estimates pseudounit values in cross-sections of household expenditure surveys without quantity information. Household surveys traditionally record only expenditure information. The lack of information about quantities purchased precludes the possibility of deriving household-specific unit values. We use a theoretical result developed by Lewbel (1989, Review of Economic Studies 56: 311–316) to construct pseudounit values by first reproducing cross-sectional price variation, then adding this variability to the aggregate price indexes published by national statistical institutes. We illustrate the method with an example that uses a time series of cross-sections of Italian household budgets.