Escobal, J., Agüero, J. (1996). Ajuste macroeconómico y distribución del ingreso en el Perú 1985-1994. En G. Moncada y R. Webb (Eds.), ¿Cómo estamos?: análisis de la encuesta de niveles de vida (pp. 41-59). Lima: Instituto Cuánto.

The objective of this paper is twofold. First, it shows how the fall in overall household spending in Peru during the period of crisis and adjustment (1985-1991) would have been, although substantial, smaller than aggregate figures have been suggesting. In fact, the reduction in spending during that period would have been in the order of 40%, with a recovery of 34% between 1991 and 1994.

Second, the document presents the evolution of the distribution of spending, showing that between 1985 and 1991 – unlike what appears to be the Latin American experience of the 1980s – the economic crisis was accompanied by a “perverse” improvement in the distribution of spending, which is equivalent to saying that the distribution of “income” in Peru became less unequal.

On the other hand, during the 1991-1994 period, characterized by a recovery of the Peruvian economy, household-level data suggest that inequality in the distribution of spending continued to decline, albeit at a much slower rate. The paper shows how the results at the total expenditure level are consistent with the evidence from the food expenditure series for the three reference periods.