Money matters: consumption variability across the income distribution

Using the Consumer Expenditure Survey, we document the level and variability of quarterly consumption across the socio‐economic distribution. While the measurement of well‐being is focused on income, the secular and policy discourse prioritises income‐adequacy to meet family needs. This concern over...

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Bibliographic Details
Published in:Fiscal studies 2023-09, Vol.44 (3), p.275-298
Main Authors: Fisher, Jonathan, Hardy, Bradley L.
Format: Article
Language:English
Subjects:
Adequacy
consumption variability
Disadvantaged
Entertainment
Food consumption
Households
Income distribution
inequality
Measurement
Minority groups
Mobility
Money
Secularism
Variability
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Summary:Using the Consumer Expenditure Survey, we document the level and variability of quarterly consumption across the socio‐economic distribution. While the measurement of well‐being is focused on income, the secular and policy discourse prioritises income‐adequacy to meet family needs. This concern over income‐adequacy centres on the capacity of families to predictably consume minimally acceptable levels of basic needs, and the social and economic mobility consequences of low consumption. Our results show a clear socio‐economic and demographic gradient of lower consumption amid higher consumption variability for disadvantaged groups. Food, entertainment, and personal care goods and services exhibit relatively high levels of consumption variability among low‐income households.
ISSN:0143-5671
1475-5890
DOI:10.1111/1475-5890.12339