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Consumer Expenditures and Inequality: An Analysis Based on Decomposition of the Gini Coefficient

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  • Garner, Thesia I

Abstract

Inequality in U.S. consumption expenditures is examined using the Lerman and Yitzhaki covariance method for decomposing the Gini coefficient by factors. From the decomposition, nonparametric estimates of elasticities with respect to total expenditures are derived. Using data from the 1987 U.S. Consumer Expenditure Interview Survey, the overall Gini based on total annual consumption expenditures is 0.33. Consistent with parametric expenditure elasticities, the Gini expenditure elasticities for household operations, apparel and services, and entertainment are relatively high. An implication of this result is that taxing such goods and services will increase the progressivity or reduce the regressivity of the tax system. Copyright 1993 by MIT Press.

Suggested Citation

  • Garner, Thesia I, 1993. "Consumer Expenditures and Inequality: An Analysis Based on Decomposition of the Gini Coefficient," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 134-138, February.
  • Handle: RePEc:tpr:restat:v:75:y:1993:i:1:p:134-38
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    Cited by:

    1. Paul, Satya, 2004. "Income sources effects on inequality," Journal of Development Economics, Elsevier, vol. 73(1), pages 435-451, February.
    2. Stéphane Mussard, 2006. "La décomposition des mesures d’inégalité en sources de revenu : l’indice de Gini et les généralisations," Cahiers de recherche 06-05, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    3. Cecilia García-Peñalosa & Elsa Orgiazzi, 2013. "Factor Components of Inequality: A Cross-Country Study," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(4), pages 689-727, December.
    4. Pedro Cavalcanti Ferreira & Marcelo Rodrigues dos Santos, 2013. "The Effect of Social Security, Health, Demography and Technology on Retirement," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(2), pages 350-370, April.
    5. Francesca Gastaldi & Paolo Liberati & Elena Pisano & Simone Tedeschi, 2014. "Progressivity-Improving VAT Reforms in Italy," Working papers 6, Società Italiana di Economia Pubblica.
    6. Eva Sierminska & Thesia Garner, 2002. "A Comparison of Income, Expenditures, and Home Market Value Distributions using Luxembourg Income Study Data from the 1990s," LIS Working papers 338, LIS Cross-National Data Center in Luxembourg.
    7. Essama-Nssah, B., 2002. "Assessing the distributional impact of public policy," Policy Research Working Paper Series 2883, The World Bank.
    8. Susan Dynarski & Jonathan Gruber, 1997. "Can Families Smooth Variable Earnings?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1), pages 229-303.
    9. Wodon, Quentin & Yitzhaki, Shlomo, 2003. "The effect of using grouped data on the estimation of the Gini income elasticity," Economics Letters, Elsevier, vol. 78(2), pages 153-159, February.
    10. Wodon, Quentin & Yitzhaki, Shlomo, 2002. "Inégalité et bien-être social
      [Inequality and Social Welfare]
      ," MPRA Paper 10488, University Library of Munich, Germany.
    11. Daniele Checchi & Cecilia García-Peñalosa & Lara Vivian, 2016. "Are changes in the dispersion of hours worked a cause of increased earnings inequality?," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-34, December.
    12. Yitzhaki, Shlomo, 2002. "Do we need a separate poverty measurement?," European Journal of Political Economy, Elsevier, vol. 18(1), pages 61-85, March.
    13. Berri, Akli & Vincent Lyk-Jensen, Stéphanie & Mulalic, Ismir & Zachariadis, Theodoros, 2014. "Household transport consumption inequalities and redistributive effects of taxes: A repeated cross-sectional evaluation for France, Denmark and Cyprus," Transport Policy, Elsevier, vol. 36(C), pages 206-216.
    14. Mussard, Stéphane, 2007. "La décomposition des mesures d’inégalité en sources de revenu : méthodes et applications," L'Actualité Economique, Société Canadienne de Science Economique, vol. 83(3), pages 415-445, septembre.
    15. Erich Battistin, 2002. "Errors in Survey Reports of Consumption Expenditures," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 C4-2, International Conferences on Panel Data.
    16. Berri, Akli & Vincent Lyk-Jensen, Stéphanie & Mulalic, Ismir & Zachariadis, Theodoros, 2014. "Household transport consumption inequalities and redistributive effects of taxes: A repeated cross-sectional evaluation for France, Denmark and Cyprus," Transport Policy, Elsevier, vol. 36(C), pages 206-216.
    17. Wodon, Quentin & Yitzhaki, Shlomo, 2002. "Inequality and Social Welfare," MPRA Paper 12298, University Library of Munich, Germany.
    18. P. Lazaridis, 2000. "Decomposition of Food Expenditure Inequality: An Application of the Extended Gini Coefficient to Greek Micro-Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 52(2), pages 179-193, November.
    19. Souksavanh VIXATHEP & Phanhpakit ONPHANHDALA & Phaythoune PHOMVIXAY, 2013. "Land Distribution and Rice Sufficiency in Northern Laos," GSICS Working Paper Series 27, Graduate School of International Cooperation Studies, Kobe University.
    20. Wodon, Quentin & Yitzhaki, Shlomo, 2002. "Desigualdad y bienestar social
      [Inequality and Social Welfare]
      ," MPRA Paper 10487, University Library of Munich, Germany.
    21. Wodon, Quentin & Yitzhaki, Shlomo, 2002. "Неравенство И Общественное Благосостояние
      [Inequality and Social Welfare]
      ," MPRA Paper 10489, University Library of Munich, Germany.
    22. repec:ijm:journl:v10:y:2017:i:1:p:39-72 is not listed on IDEAS
    23. Akli Berri, 2009. "Transport consumption inequalities and redistributive effects of taxes: A repeated cross-sectional evaluation on French household data," Working Papers 145, ECINEQ, Society for the Study of Economic Inequality.

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