Publication

This paper analyzes the differences in purchasing power and consumption possibilities of a US and an Indonesian household. The authors estimate the differences in household per capita expenditure using a simple inversion of the Engel’s law between the share of food in consumption and total income/expenditure. The findings indicate that the consumption of the median household in a developing country would have to rise 5 to 10 fold to reach the level of a household at the poverty line in an OECD country.