Garry Barrett and Thomas Crossley were visitors at the Australian National University during the preparation of this paper and they thank that institution for its hospitality. The authors thank Jeff Borland, Lisa Cameron, Bruce Chapman, John Freebairn, Bob Gregory, Sue Richardson, Michael Veall, seminar participants at Australia National University and participants in the Australian Labour Econometrics Workshop and an anonymous referee for helpful comments. All remaining errors are due to the authors.
Consumption and Income Inequality in Australia
Article first published online: 22 OCT 2007
Volume 76, Issue 233, pages 116–138, June 2000
How to Cite
BARRETT, G. F., CROSSLEY, T. F. and WORSWICK, C. (2000), Consumption and Income Inequality in Australia. Economic Record, 76: 116–138. doi: 10.1111/j.1475-4932.2000.tb00011.x
- Issue published online: 22 OCT 2007
- Article first published online: 22 OCT 2007
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.