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Consumption and Income Inequality in Australia

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  • GARRY F. BARRETT
  • THOMAS F. CROSSLEY
  • CHRISTOPHER WORSWICK

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.

Suggested Citation

  • Garry F. Barrett & Thomas F. Crossley & Christopher Worswick, 2000. "Consumption and Income Inequality in Australia," The Economic Record, The Economic Society of Australia, vol. 76(233), pages 116-138, June.
    • Handle: RePEc:bla:ecorec:v:76:y:2000:i:233:p:116-138
    DOI: 10.1111/j.1475-4932.2000.tb00011.x
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