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What Really Happened to Consumption Inequality in the United States?

What Really Happened to Consumption Inequality in the United States?

Chapter:
(p.515) 17 What Really Happened to Consumption Inequality in the United States?
Source:
Hard-to-Measure Goods and Services
Author(s):
Orazio AttanasioErich BattistinHidehiko Ichimura
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226044507.003.0018

This chapter examines data quality issues for the analysis of consumption inequality, exploiting two complementary data sets from the Consumer Expenditure Survey—one known as the Interview sample and the other as the Diary sample. It develops a methodology that extracts and combines the most reliable information from each sample to derive a correction for the measurement error affecting observed measures of consumption inequality in the two surveys. It concludes that consumption inequality, as measured by the standard deviation of the log of nondurable consumption, has increased by roughly 5 percent during the 1990s.

Keywords:   data quality, Consumer Expenditure Survey, measurement error, consumption inequality

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