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

Author

Listed:
  • Mike Brewer

    () (Institute for Fiscal Studies and University of Essex)

  • Cormac O'Dea

    () (Institute for Fiscal Studies)

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.

Suggested Citation

  • Mike Brewer & Cormac O'Dea, 2012. "Measuring living standards with income and consumption: evidence from the UK," IFS Working Papers W12/12, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:ifsewp:12/12
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    File URL: http://www.ifs.org.uk/wps/wp1212.pdf
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    References listed on IDEAS

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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. On measuring income standards
      by Economic Logician in Economic Logic on 2012-09-07 19:24:00

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    Cited by:

    1. Filer, Randall K. & Hanousek, Jan & Lichard, Tomáš & Torosyan, Karine, 2016. ""Flattening" the Tax Evasion: Evidence from the Post-Communist Natural Experiment," CEPR Discussion Papers 11229, C.E.P.R. Discussion Papers.
    2. Gabriella Donatiello & Marcello D’Orazio & Doriana Frattarola & Antony Rizzi & Mauro Scanu & Mattia Spaziani, 2014. "Statistical Matching of Income and Consumption Expenditures," International Journal of Economic Sciences, University of Economics, Prague, vol. 2014(3), pages 50-65.
    3. Antoine Bozio & Guy Laroque & Cormac O’Dea, 2017. "Discount rate heterogeneity among older households: a puzzle?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(2), pages 647-680, April.
    4. Tomas Lichard & Jan Hanousek & Randall K. Filer, 2012. "Measuring the Shadow Economy: Endogenous Switching Regression with Unobserved Separation," Economics Working Paper Archive at Hunter College 438, Hunter College Department of Economics.
    5. Tess Penne & Irene Cussó Parcerisas & Lauri Mäkinen & Bérénice Storms & Tim Goedemé, 2016. "Can reference budgets be used as a poverty line?," ImPRovE Working Papers 16/05, Herman Deleeck Centre for Social Policy, University of Antwerp.
    6. Cloyne, James & Ferreira, Clodomiro & Surico, Paolo, 2015. "Monetary Policy when Households have Debt: New Evidence on the Transmission Mechanism," CEPR Discussion Papers 11023, C.E.P.R. Discussion Papers.
    7. Mike Brewer & Liam Wren-Lewis, 2016. "Accounting for Changes in Income Inequality: Decomposition Analyses for the UK, 1978–2008," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(3), pages 289-322, June.
    8. Figari, Francesco & Paulus, Alari & Sutherland, Holly, 2014. "Microsimulation and policy analysis," ISER Working Paper Series 2014-23, Institute for Social and Economic Research.
    9. Paolo Surico & Clodomiro Ferreira & James Cloyne, 2015. "Housing Debt and the Transmission of Monetary Policy," 2015 Meeting Papers 629, Society for Economic Dynamics.
    10. Hancock, Ruth & Morciano, Marcello & Pudney, Stephen, 2013. "Nonparametric estimation of a compensating variation: the cost of disability," ISER Working Paper Series 2013-26, Institute for Social and Economic Research.
    11. Claire Lebarz, 2015. "Income Inequality and Household Debt Distribution: A Cross-Country Analysis using Wealth Surveys," LWS Working papers 20, LIS Cross-National Data Center in Luxembourg.

    More about this item

    Keywords

    consumption; measuring living standards; inequality; poverty;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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