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Consumption, Needs and Inequality

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  • Slesnick, Daniel T

Abstract

Most empirical studies demonstrating a U-turn in inequality in the United States are based on the distribution of income. However, utility is derived from the consumption of goods and services and there are many reasons to expect the distribution of expenditure to be different from the distribution of income. The author demonstrates that consumption-based inequality indexes actually decrease over the postwar era. This conclusion differs from the stylized facts because of differences in the income and expenditure distributions. Differences also arise from the inclusion of equivalence scales to account for the different needs of heterogeneous households. Copyright 1994 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Slesnick, Daniel T, 1994. "Consumption, Needs and Inequality," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(3), pages 677-703, August.
  • Handle: RePEc:ier:iecrev:v:35:y:1994:i:3:p:677-703
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    Cited by:

    1. Parry, Ian & Walls, Margaret & Sigman, Hilary & Williams III, Roberton, 2005. "The Incidence of Pollution Control Policies," Discussion Papers dp-05-24, Resources For the Future.
    2. Parry, Ian W. H., 2004. "Are emissions permits regressive?," Journal of Environmental Economics and Management, Elsevier, vol. 47(2), pages 364-387, March.
    3. Bruce D. Meyer & James X. Sullivan, 2017. "Consumption and income inequality in the US since the 1960s," AEI Economics Working Papers 953873, American Enterprise Institute.
    4. Maria Martínez, 2005. "Distributive Aspects of Public Expenditure on Housing in Spain," European Journal of Housing Policy, Taylor and Francis Journals, vol. 5(3), pages 237-253, December.
    5. Udo Ebert, 2011. "The redistribution of income when needs differ," Working Papers V-331-11, University of Oldenburg, Department of Economics, revised Feb 2011.
    6. Jay S. Coggins & Federico Perali, 2000. "Voting For Equity: Estimating Society'S Preferences Toward Inequality," CHILD Working Papers wp04_00, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    7. repec:old:wpaper:331 is not listed on IDEAS
    8. Hung-Hao Chang, 2012. "Consumption inequality between farm and nonfarm households in Taiwan: a decomposition analysis of differences in distribution," Agricultural Economics, International Association of Agricultural Economists, vol. 43(5), pages 487-498, September.
    9. Blundell, Richard William & Pistaferri, Luigi & Preston, Ian, 2002. "Partial Insurance, Information, and Consumption Dynamics," CEPR Discussion Papers 3666, C.E.P.R. Discussion Papers.
    10. Fisher, Jonathan D. & Johnson, David S. & Marchand, Joseph & Smeeding, Timothy M. & Torrey, Barbara Boyle, 2008. "The retirement consumption conundrum: Evidence from a consumption survey," Economics Letters, Elsevier, vol. 99(3), pages 482-485, June.
    11. Michael Hurd & Susann Rohwedder, 2006. "Consumption and Economic Well-Being at Older Ages: Income- and Consumption-Based Poverty Measures in the HRS," Working Papers wp110, University of Michigan, Michigan Retirement Research Center.
    12. Michael D. Hurd & Susann Rohwedder, 2006. "Economic Well-Being at Older Ages: Income- and Consumption-Based Poverty Measures in the HRS," NBER Working Papers 12680, National Bureau of Economic Research, Inc.
    13. Salvatore Morelli & Timothy Smeeding & Jeffrey Thompson, 2014. "Post-1970 Trends in Within-Country Inequality and Poverty: Rich and Middle Income Countries," CSEF Working Papers 356, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    14. Jones, Carol Adaire & Milkove, Daniel & Paszkiewicz, Laura, 2009. "Measuring Farm Household Well-Being: Comparing Consumption and Income-based Measures," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49355, Agricultural and Applied Economics Association.
    15. repec:zbw:hohpro:331 is not listed on IDEAS

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