Consumption inequality and partial insurance
Richard Blundell (),
Luigi Pistaferri and
Ian Preston
No W04/28, IFS Working Papers from Institute for Fiscal Studies
Abstract:
This paper describes the transmission of income inequality into consumption inequality and in so doing investigates the degree of insurance to income shocks. It combines panel data on income from the PSID with consumption data from repeated CEX cross-sections and distinguishes between permanent and transitory income shocks. We find some partial insurance of permanent income shocks with more insurance possibilities for the college educated and those nearing retirement. We find little evidence against full insurance for transitory income shocks except among low income households. Tax and welfare benefits are found to play an important role in insuring permanent shocks. Adding durable expenditures to the consumption measure suggests that durable replacement is an important insurance mechanism, especially for transitory income shocks.
Pages: 49 pp.
Date: 2004-11-03
New Economics Papers: this item is included in nep-ias and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (74)
Downloads: (external link)
http://www.ifs.org.uk/wps/wp0428.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.ifs.org.uk/wps/wp0428.pdf [301 Moved Permanently]--> https://www.ifs.org.uk/wps/wp0428.pdf [302 Found]--> https://ifs.org.uk/wps/wp0428.pdf)
Related works:
Journal Article: Consumption Inequality and Partial Insurance (2008) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ifs:ifsewp:04/28
Ordering information: This working paper can be ordered from
The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE
Access Statistics for this paper
More papers in IFS Working Papers from Institute for Fiscal Studies The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE. Contact information at EDIRC.
Bibliographic data for series maintained by Emma Hyman ().