This paper maintains the purchased food expenditure aggregate as calculated in the INS file, with the proviso that it may lead to a downward bias in the expenditure data for 1995. It should be noted, however, that some of the puzzling trends noted in the next section of the paper (e.g. the large increase in poverty among West Forest export crop farmers, the larger growth in household expenditure among Savannah farmers relative to East Forest farmers) persist even if the 12 month estimate of purchased food expenditure is used in calculating total household expenditure.

# Shortcomings of the **CPI**

Published CPI information is available for three categories of households (blue-collar workers, white collar workers managers, and European-type consumption) in Abidjan. The expenditure shares are based on a 1976 consumption survey, while base prices currently in use are the mean November 1992-October 1993 prices. Prior to 1993, the CPI was based on the August 1984 to July 1985 prices. In addition in 1993, the INS shifted to actually purchasing goods at the market. So there may be some problem of comparability between the pre- and post-1993 consumer price indices. The major shortcomings of the deflators used to calculate real household expenditure and thus the poverty indicators are (1) the difference between the expenditure shares used to construct the CPI and the survey shares and (2) the absence of regional price indices. The large differences in expenditure patterns across the country illustrate the need for region-specific CPIs based on actual expenditure patterns and price increases.

There is a large difference in the expenditure shares on which the CPI is based and those derived from the surveys. Table 29 compares the consumption weights in the CPI basket for blue-collar Abidjan workers with the expenditure shares derived for Abidjan poor and non-poor households. The major difference is poor households spend a much greater proportion of their expenditure on housing and utilities than is indicated by the CPI basket. Even m non-poor Abidjan households the share of expenditure on housing and utilities as revealed by the survey exceeds the share in the CPI basket. Moreover, the difference is actually understated, since remittances are part of the survey consumption basket, but not part of the CPI. If remittances were eliminated from the survey consumption basket, the survey share of expenditure on housing would be even greater.

Since lodging and utilities had the lowest rates of inflation of any category in the CPI between December 1993 and March 1995 (table 30), a higher share of expenditure allocated to housing and utilities would result in a lower inflation rate, and thus in higher real per capita expenditures on 1995. As a rough indication of how the inflation rate would change if one were to use the survey consumption weights base, mean expenditure per capita on average would be about 2 percent higher using the survey expenditure shares. However, this calculation abstracts from the fact that the composition within the **26** various groups of expenditure may differ significantly between the CPI and the household surveys, as the discussion of the composition of the food subcomponent, below, illustrates.

A second shortcoming of the INS CPI series is that there is no CPI series for the rural areas. To deflate expenditures in the household surveys, INS constructed a deflator for each region for 1985 based on price differentials calculated from the International Comparison of Prices survey data (Grootaert and Kanbur, 1994). The price deflator for Abidjan was used to construct the price series

**26** We assume that the inflation rates for the categories in the remittances, non-food in kind and education in the survey is equal to the weighted inflation rate of the other categories. This calculation is based on the December 1993 and March 1994 CPI inflation rates.

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