Inflation and the personal distribution of income in Portugal.

Doutoramento em Economia.

This thesis is about differential inflation in Portugal during the period 1971-81 and its influence on the personal distribution of income. The analysis is carried out separately for four regions, using different comodity price information in each of them. Price indices are computed for each of the 15,914 households of the 1973/74 Household Expenditure Survey, and their distributions analysed. Cost-of-living indices are calculated from the estimated parameters of the Linear Expenditure System, and in order to characterize the personal income distributions, several empirical equivalence scales are computed. The results emphasize the inadequacy of a single Consumer Price Index (CPI) to represent the experienced rates of inflation of all households in each of the regions. As a rule we find a significant, indirect correlation between the rate of inflation and the household's income. The existence of different commodity price information for each region is of considerable importance in explaining the contrasting differential inflation between some of the regions.