Measuring the Cost of Living in Mexico and the Us

23 Pages Posted: 14 Sep 2020

See all articles by David Argente

David Argente

Pennsylvania State University

Chang-Tai Hsieh

University of Chicago - Booth School of Business; University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER)

Munseob Lee

University of California San Diego

Multiple version iconThere are 2 versions of this paper

Date Written: September 2020

Abstract

Cross-country price indexes are crucial to compare living standards between countries and to measure global inequality. An accurate measurement of these price indexes is a difficult task because of the lack of accurate data on the consumption patterns of different countries. We construct a unique data on prices and quantities for consumer packaged goods matched at the barcode-level across the United States and Mexico. We estimate that the Mexican real consumption relative to the United States is larger than previously estimated. We identify heterogeneity in shopping behavior, quality of products, and variety availability as important sources of bias in international price comparisons.

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Suggested Citation

Argente, David and Hsieh, Chang-Tai and Lee, Munseob, Measuring the Cost of Living in Mexico and the Us (September 2020). NBER Working Paper No. w27806, Available at SSRN: https://ssrn.com/abstract=3692162

David Argente (Contact Author)

Pennsylvania State University ( email )

606 Kern Building
State College, PA 16801
United States

Chang-Tai Hsieh

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

University of California, Berkeley - Department of Economics ( email )

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Berkeley, CA 94720-3880
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National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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Munseob Lee

University of California San Diego ( email )

9500 Gilman Drive
La Jolla, CA 92093
United States

HOME PAGE: http://sites.google.com/site/munseob

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