Class matters: tracking urban inequality in post-liberalization India using a durables-based mixture model

Abstract

ABSTRACTWe identify the (urban) lower, middle and upper classes in India in 1993–1994, 1999–2000 and 2004–05, using a durables-based mixture model after Maitra (2016). This approach allows a comparison of Indian consumption inequality in the 1990s, despite the well-documented non-comparability of expenditure data from this period. Shorrock’s (1980) inequality index is then used to break up inequality into between-class and within-class components. We find evidence that the interim year 1999–2000 was a year of transition (following economic liberalization in 1991), and that between-class inequality became more pronounced in the later years, relative to within-class inequality.