@TechReport{iza:izadps:dp15674,
            	author={Farrokhi, Farid and Jinkins, David Carson and Xiang, Chong},
            	title={Gains from Trade and the Food Engel Curve},
            	year={2022},
	month={Oct},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={15674},
            	url={https://www.iza.org/publications/dp15674},
	abstract={This paper examines the extent to which gains-from-trade predictions from commonly-used trade theories are consistent with observed household consumption decisions. Our approach is based on inference from household-level estimation of food Engel curves in the US and in a few other countries. For a given price index as the deflator of income, deviations from food Engel curves indicate how biased that price index is relative to the true household price index. We construct open-economy price indices based on trade theory and data, evaluate their biases according to our approach, and compare them with the bias of official CPI statistics. We find that theory-consistent open-economy price indices that account for industry-level heterogeneity and input-output linkages tend to eliminate a large fraction of the bias of CPI.},
	keywords={Food Engel Curves;price indices;household-level consumption;gains from trade},
            }