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Consumer Debt and the Measurement of Poverty and Inequality in the US

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  • Steven Pressman
  • Robert Scott

Abstract

This paper argues that interest on consumer debt must be taken into account when measuring poverty and inequality. These interest payments cannot be used to support household living standards. This makes middle- and low-income households worse off. Recent increases in consumer debt means that this deterioration in living standards is not captured by conventional government statistics. Using the Survey of Consumer Finances, we make estimates of poverty and inequality that take into account rising interest payments on consumer debt and discuss some of the implications of these estimates.

Suggested Citation

  • Steven Pressman & Robert Scott, 2009. "Consumer Debt and the Measurement of Poverty and Inequality in the US," Review of Social Economy, Taylor & Francis Journals, vol. 67(2), pages 127-148.
    • Handle: RePEc:taf:rsocec:v:67:y:2009:i:2:p:127-148
    DOI: 10.1080/00346760802578890
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    References listed on IDEAS

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    1. Rose D. Friedman, 1965. "Poverty: Definition and Perspective," Books, American Enterprise Institute, number 51389, September.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Pressman and Scott on measuring poverty
      by Mark D. White in Economics and Ethics on 2009-10-23 17:49:19

    Citations

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    Cited by:

    1. Fenaba R. Addo & Xing Zhang, 2020. "Debt Concordance and Relationship Quality: A Couple-Level Analysis," Journal of Family and Economic Issues, Springer, vol. 41(3), pages 405-423, September.
    2. Hanna Karolina Szymborska, 2022. "Rethinking inequality in the 21st century – inequality and household balance sheet composition in financialized economies," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 45(1), pages 24-72, January.
    3. Tomas Zelinsky, 2014. "Regional Poverty Levels in the European Union: A Spatial Econometric Approach," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(2), pages 62-69.
    4. Paulo L. Santos, 2014. "A Note on Credit Allocation, Income Distribution and the Circuit of Capital," Metroeconomica, Wiley Blackwell, vol. 65(2), pages 212-236, May.
    5. Barbieri Góes, Maria Cristina, 2023. "A tale of three prices: Monetary policy and autonomous consumption in the US," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 115-127.
    6. Wilfred Dolfsma & Deborah Figart & Robert McMaster & Martha Starr, 2012. "Promoting Research on Intersections of Economics, Ethics, and Social Values: Editorial," Review of Social Economy, Taylor & Francis Journals, vol. 70(2), pages 155-163, June.
    7. Steven Pressman, 2009. "Public Policies and the Middle Class throughout the World in the Mid 2000s," LIS Working papers 517, LIS Cross-National Data Center in Luxembourg.
    8. Roberto Veneziani & Luca Zamparelli & Leila E. Davis, 2017. "Financialization And Investment: A Survey Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1332-1358, December.
    9. Lungile Ntsalaze & Sylvanus Ikhide, 2018. "Rethinking Dimensions: The South African Multidimensional Poverty Index," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 135(1), pages 195-213, January.
    10. Jackson P. Lautier & Vladimir Pozdnyakov & Jun Yan, 2022. "On the Convergence of Credit Risk in Current Consumer Automobile Loans," Papers 2211.09176, arXiv.org, revised Jan 2024.
    11. Jacob Assa, 2015. "Financial Output as Economic Input: Resolving the Inconsistent Treatment of Financial Services in the National Accounts," Working Papers 1501, New School for Social Research, Department of Economics.
    12. Geranda Notten, 2016. "How Poverty Indicators Confound Poverty Reduction Evaluations: The Targeting Performance of Income Transfers in Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(3), pages 1039-1056, July.

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