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Measuring living standards with income and consumption: evidence from the UK

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  • Brewer, Mike
  • O'Dea, Cormac

Abstract

This paper compares consumption and income as measures of households’ living standards using UK data. It presents evidence that income is likely to be under-recorded for households with low resources. It describes the different impressions one gets about trends in the level and inequality of living standards in the UK when using consumption, and when one adds an imputed income from housing, rather than near-cash income. It describes what different impressions one gets about the composition of households with low living standards if these are identified with consumption rather than income.

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File URL: https://www.iser.essex.ac.uk/publications/working-papers/iser/2012-05.pdf
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Bibliographic Info

Paper provided by Institute for Social and Economic Research in its series ISER Working Paper Series with number 2012-05.

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Date of creation: 13 Mar 2012
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Publication status: published
Handle: RePEc:ese:iserwp:2012-05

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Postal: Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK
Phone: 44-1206-872957
Fax: 44-1206-873151
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Web page: https://www.iser.essex.ac.uk/
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Postal: Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK
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Web: https://www.iser.essex.ac.uk/publications/

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References

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  1. Harley Frazis & Jay Stewart, 2011. "How does household production affect measured income inequality?," Journal of Population Economics, Springer, Springer, vol. 24(1), pages 3-22, January.
  2. Poterba, James M, 1989. "Lifetime Incidence and the Distributional Burden of Excise Taxes," American Economic Review, American Economic Association, American Economic Association, vol. 79(2), pages 325-30, May.
  3. Richard Blundell & Hamish Low & Ian Preston, 2008. "Decomposing changes in income risk using consumption data," IFS Working Papers, Institute for Fiscal Studies W08/13, Institute for Fiscal Studies.
  4. Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001. "Measurement error in survey data," Handbook of Econometrics, Elsevier, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843 Elsevier.
  5. Slesnick, Daniel T, 1993. "Gaining Ground: Poverty in the Postwar United States," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(1), pages 1-38, February.
  6. Romina Boarini & Marco Mira d'Ercole, 2006. "Measures of Material Deprivation in OECD Countries," OECD Social, Employment and Migration Working Papers 37, OECD Publishing.
  7. Garry Barrett & Peter Levell & Kevin Milligan, 2013. "A Comparison of Micro and Macro Expenditure Measures Across Countries Using Differing Survey Methods," NBER Working Papers 19544, National Bureau of Economic Research, Inc.
  8. Sutherland, Holly & DeCoster, Andre & Matsaganis, Manos & Tsakloglou, Panos, 2009. "Accurate income measurement for the assessment of public policies: final report," EUROMOD Working Papers EM7/09, EUROMOD at the Institute for Social and Economic Research.
  9. Andrew Leicester, 2012. "How might in-home scanner technology be used in budget surveys?," IFS Working Papers, Institute for Fiscal Studies W12/01, Institute for Fiscal Studies.
  10. Richard Blundell & Ben Etheridge, 2010. "Consumption, Income and Earnings Inequality in Britain," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 76-102, January.
  11. repec:ese:iserwp:2009-33 is not listed on IDEAS
  12. Richard Bavier, 2008. "Reconciliation of income and consumption data in poverty measurement," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 27(1), pages 40-62.
  13. Kevin Milligan, 2008. "The Evolution of Elderly Poverty in Canada," Canadian Public Policy, University of Toronto Press, University of Toronto Press, vol. 34(s1), pages 79-94, November.
  14. Richard Blundell & Ian Preston, 1997. "Consumption, inequality and income uncertainty," IFS Working Papers, Institute for Fiscal Studies W97/15, Institute for Fiscal Studies.
  15. Richard Blundell & Ian Preston, 1995. "Income, expenditure and the living standards of UK households," Fiscal Studies, Institute for Fiscal Studies, Institute for Fiscal Studies, vol. 16(3), pages 40-54, August.
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Cited by:
  1. Thomas Crossley & Hamish Low & Cormac O'Dea, 2011. "Household consumption through recent recessions," IFS Working Papers, Institute for Fiscal Studies W11/18, Institute for Fiscal Studies.

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