Measuring The Distribution Of Well-Being: Why Income and Consumption Give Different Answers
AbstractAnnual, before-tax income is the most common official statistic used to measure economic well-being and therefore underlies the design of most anti-poverty programs or other redistributive economic policies. Notwithstanding, extended income measures as well as consumption based measures are gaining increasing currency in scientific analysis of economic well-being. Our findings suggest that a consumption-based measure gives very different answers about relative economic standing across income and age groups, and somewhat different answers about trends in resources over time. More importantly, by explicitly measuring the relationship between income and consumption across groups and time, we are able to evaluate how differences in effective taxation, saving rates, and investment in consumer durables affect the alternative measures of economic well-being.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät in its series Hannover Economic Papers (HEP) with number dp-201.
Length: 31 pages
Date of creation: Mar 1997
Date of revision:
Economic Welfare; Measurement of Inequality; Demographic Economics; Income; Saving; Consumption; Taxation;
Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
- J1 - Labor and Demographic Economics - - Demographic Economics
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hurd, Michael D, 1990. "Research on the Elderly: Economic Status, Retirement, and Consumption and Saving," Journal of Economic Literature, American Economic Association, vol. 28(2), pages 565-637, June.
- David M. Cutler & Lawrence F. Katz, 1991. "Macroeconomic Performance and the Disadvantaged," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(2), pages 1-74.
- Hanratty, Maria J & Blank, Rebecca M, 1992. "Down and Out in North America: Recent Trends in Poverty Rates in the United States and Canada," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 233-54, February.
- A. L. Robb & L. Magee & J. B. Burbidge, 1992. "Kernel Smoothed Consumption-Age Quantiles," Canadian Journal of Economics, Canadian Economics Association, vol. 25(3), pages 669-80, August.
- Smeeding, Timothy M, et al, 1993. "Poverty, Inequality, and Family Living Standards Impacts across Seven Nations: The Effect of Noncash Subsidies for Health, Education and Housing," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(3), pages 229-56, September.
- A. L. Robb & J. B. Burbidge, 1989. "Consumption, Income, and Retirement," Canadian Journal of Economics, Canadian Economics Association, vol. 22(3), pages 522-42, August.
- Slesnick, Daniel T, 1993. "Gaining Ground: Poverty in the Postwar United States," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 1-38, February.
- John Sabelhaus & Joyce Manchester, 1995. "Baby Boomers and Their Parents: How Does Their Economic Well-Being Compare in Middle Age?," Journal of Human Resources, University of Wisconsin Press, vol. 30(4), pages 791-806.
- Sabelhaus, John, 1993. "What is the Distributional Burden of Taxing Consumption?," National Tax Journal, National Tax Association, vol. 46(3), pages 331-44, September.
- Riccardo Massari, 2005. "A Measure of Welfare Based on Permanent Income Hypothesis: An Application on Italian Households Budgets," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 64(1), pages 55-92, September.
- Jurgen Faik & Uwe Fachinger, 2013. "The decomposition of well-being categories: An application to Germany," Working Papers 307, ECINEQ, Society for the Study of Economic Inequality.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Heidrich, Christian).
If references are entirely missing, you can add them using this form.