Inequality in 3-D: Income, Consumption, and Wealth
Timothy Smeeding and
Jeffrey Thompson ()
No 2018-001, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)
We do not need to and should not have to choose amongst income, consumption, or wealth as the superior measure of well-being. All three individually and jointly determine well-being. We are the first to study inequality in three conjoint dimensions for the same households, using income, consumption, and wealth from the 1989-2016 Surveys of Consumer Finances (SCF). The paper focuses on two questions. What does inequality in two and three dimensions look like? Has inequality in multiple dimensions increased by less, by more, or by about the same as inequality in any one dimension? We find an increase in inequality in two dimensions and in three dimensions, with a faster increase in multi-dimensional inequality than in one-dimensional inequality. Viewing inequality through one dimension greatly understates the level and the growth in inequality in two and three dimensions. The U.S. is becoming more economically unequal than is generally understood.
Keywords: Inequality; Wealth; Consumption (search for similar items in EconPapers)
JEL-codes: D31 E21 I31 (search for similar items in EconPapers)
Pages: 49 pages
New Economics Papers: this item is included in nep-mac
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Journal Article: Inequality in 3‐D: Income, Consumption, and Wealth (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2018-01
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