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Consumption inequality in France between 1995 and 2011

Ch.-M. Chevalier
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Ch.-M. Chevalier: Insee

Documents de Travail de l'Insee - INSEE Working Papers from Institut National de la Statistique et des Etudes Economiques

Abstract: How did consumption inequalities evolve in France over the last two decades, and notably compared to disposable income? For the United States in particular, while earliest long run measures of consumption inequalities displayed stability, this pattern has been challenged by a refined indicator mitigating under-reporting and depicting an increase of the same order of magnitude as for disposable income (Aguiar and Bils, 2015). Relying on the survey Budget de famille between 1995 and 2011, this work first develops standard inequality measures for France and derives them with respect to consumption categories, ages and household compositions. Under a standard sample and consumption bundle, consumption inequality did not track income inequality in France especially during the crisis. By consumption category, the level of consumption inequality is lower and increased for inferior goods. Second, to correct potential systematic under-reporting errors, an alternative indicator similar to Aguiar and Bils (2015) is built relying on differences in luxuries and necessities expenditures between high- and low-income households. Yet, there seems to be no problem due to mis-measurement related to specific income groups over the whole time period in France. Relatedly, the alternative indicator of consumption inequality depicts no rising pattern, such as the one observed for the United States due to large relative underreporting by high-income respondents. Thus, both the standard and alternative inequality indicators do not illustrate consumption inequalities rising as income inequalities. As the latter did not increase to a large extent, this slight difference does not reflect an alarming surge in household indebtedness such as for the US over the same period.

Keywords: consumption; inequality; savings; life cycle (search for similar items in EconPapers)
JEL-codes: D31 E21 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-eur and nep-mac
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