What Really Happened to Consumption Inequality in the United States?

Orazio Attanasio, Erich Battistin and Hidehiko Ichimura

in Hard-to-Measure Goods and Services

Published by University of Chicago Press

Published in print November 2007 | ISBN: 9780226044491
Published online February 2013 | e-ISBN: 9780226044507 | DOI:
What Really Happened to Consumption Inequality in the United States?

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This chapter examines data quality issues for the analysis of consumption inequality, exploiting two complementary data sets from the Consumer Expenditure Survey—one known as the Interview sample and the other as the Diary sample. It develops a methodology that extracts and combines the most reliable information from each sample to derive a correction for the measurement error affecting observed measures of consumption inequality in the two surveys. It concludes that consumption inequality, as measured by the standard deviation of the log of nondurable consumption, has increased by roughly 5 percent during the 1990s.

Keywords: data quality; Consumer Expenditure Survey; measurement error; consumption inequality

Chapter.  10346 words.  Illustrated.

Subjects: Microeconomics

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