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Consumption Segregation

Author

Listed:
  • Corina Boar
  • Elisa Giannone

Abstract

This paper introduces consumption segregation, a new margin of residential segregation, and examines its patterns, causes, and discusses its aggregate consequences. We use new longitudinal and highly granular data to measure consumption segregation in the United States and document that it is high but relatively stable over the past 15 years, with substantial regional variation. We find that income segregation plays a more prominent role than other forms of segregation in driving consumption segregation, mainly due to the inability to smooth shocks to income. We illustrate a new mechanism through which, in the presence of social comparisons, consumption segregation can exacerbate wealth inequality.

Suggested Citation

  • Corina Boar & Elisa Giannone, 2023. "Consumption Segregation," Working Papers 1406, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:1406
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    References listed on IDEAS

    as
    1. Peter Ganong & Pascal Noel, 2019. "Consumer Spending during Unemployment: Positive and Normative Implications," American Economic Review, American Economic Association, vol. 109(7), pages 2383-2424, July.
    2. Jonathan D. Fisher & David S. Johnson & Timothy M. Smeeding, 2013. "Measuring the Trends in Inequality of Individuals and Families: Income and Consumption," American Economic Review, American Economic Association, vol. 103(3), pages 184-188, May.
    3. David M. Cutler & Edward L. Glaeser, 1997. "Are Ghettos Good or Bad?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(3), pages 827-872.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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