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Consumption and Income Inequality in the United States since the 1960s

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  • Bruce D. Meyer
  • James X. Sullivan

Abstract

Recent research concludes that the rise in consumption inequality mirrors, or even exceeds, the rise in income inequality. We revisit this finding, constructing improved measures of consumption, focusing on its well-measured components that are reported at a high and stable rate relative to national accounts. While overall income inequality rose over the past 5 decades, the rise in overall consumption inequality was small. The declining quality of income data likely contributes to these differences for the bottom of the distribution. Asset price changes likely account for some of the differences in recent years for the top of the distribution.

Suggested Citation

  • Bruce D. Meyer & James X. Sullivan, 2023. "Consumption and Income Inequality in the United States since the 1960s," Journal of Political Economy, University of Chicago Press, vol. 131(2), pages 247-284.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/721702
    DOI: 10.1086/721702
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    Citations

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    Cited by:

    1. Martha J. Bailey & Leah Platt Boustan & William J. Collins, 2024. "Introduction to "The Economic History of American Inequality: New Evidence and Perspectives"," NBER Chapters, in: The Economic History of American Inequality: New Evidence and Perspectives, National Bureau of Economic Research, Inc.
    2. Alexandre Gaillard & Christian Hellwig & Philipp Wangner & Nicolas Werquin, 2023. "Consumption, Wealth, and Income Inequality: A Tale of Tails," Working Paper Series WP 2023-43, Federal Reserve Bank of Chicago.
    3. Jonathan Heathcote & Fabrizio Perri & Giovanni Violante & Lichen Zhang, 2023. "More Unequal We Stand? Inequality Dynamics in the United States, 1967–2021," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 50, pages 235-266, October.
    4. Masaru INABA & Kengo NUTAHARA & Daichi SHIRAI, 2023. "Sources of Inequality and Business Cycles: Evidence from the US and Japan," CIGS Working Paper Series 23-006E, The Canon Institute for Global Studies.
    5. Hembre, Erik & Collins, J. Michael & Wylde, Samuel, 2024. "A rising tide lifts all homes? Housing consumption trends for low-income households since the 1980s," Journal of Public Economics, Elsevier, vol. 233(C).
    6. Winfried Koeniger & Peter Kress & Jonas Lehmann, 2024. "Consumption Expenditures in Austria & Germany: New Evidence Based on Transactional Data," CESifo Working Paper Series 11408, CESifo.
    7. Ghosh, Anisha & Theloudis, Alexandros, 2023. "Consumption Partial Insurance in the Presence of Tail Income Risk," Other publications TiSEM c8da0a17-57cb-40bf-ab61-6, Tilburg University, School of Economics and Management.

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