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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," Economics Working Papers 1871, Department of Economics and Business, Universitat Pompeu Fabra.
    • Handle: RePEc:upf:upfgen:1871
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    References listed on IDEAS

    as
    1. Rebecca Diamond & Tim McQuade & Franklin Qian, 2019. "The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco," American Economic Review, American Economic Association, vol. 109(9), pages 3365-3394, September.
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    3. Moritz Drechsel-Grau & Fabian Greimel, 2018. "Falling Behind: Has Rising Inequality Fueled the American Debt Boom?," 2018 Meeting Papers 1032, Society for Economic Dynamics.
    4. 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.
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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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