Marginal propensity to consume

The possible sensitivity of the results to the estimator of pretransfer welfare is dramatically illustrated by van de Walle s calculations for the Republic of Yemen (figure 6.5). The distribution of transfers is nearly equal across deciles if the observed post-transfer per capita expenditure is used, but sharply progressive if the full transfer is subtracted from per capita expenditure. Van de Walle estimates that the marginal propensity to consume out of the trans-... 

---