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Consumption and Income Inequality in Australia

Garry Barrett (), Thomas Crossley and Christopher Worswick ()

The Economic Record, 2000, vol. 76, issue 233, 116-38

Abstract: Consumption may be a more appropriate measure of household well-being than income or earnings. Using four ABS Household Expenditures Surveys collected between 1975 and 1993, we compare trends in consumption and income inequality among Australian households. We find that consumption is much more equal than income. While there were significant increases in both income and consumption inequality, consumption inequality rose by much less. One interpretation of the results is that some income inequality in Australia reflects transitory fluctuations which households can smooth, and that part of the growth in income inequality reflects an increase in these transitory fluctuations. Copyright 2000 by The Economic Society of Australia.

Date: 2000
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