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Consumption Inequality and the Frequency of Purchases†

Consumption Inequality and the Frequency of Purchases† AbstractWe document a decline in the frequency of shopping trips in the United States since 1980 and consider its implications for the measurement of consumption inequality. A decline in shopping frequency as households stock up on storable goods (i.e., inventory behavior) will lead to a rise in expenditure inequality when the latter is measured at high frequency, even when underlying consumption inequality is unchanged. We find that most of the recently documented rise in expenditure inequality in the United States since the 1980s can be accounted for by this phenomenon. Using detailed micro data on spending, which we link to data on club/warehouse store openings, we directly attribute much of the reduced frequency of shopping trips to the rise in club/warehouse stores. (JEL D12, D31, D63, D91, E21) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Macroeconomics American Economic Association

Consumption Inequality and the Frequency of Purchases†

Consumption Inequality and the Frequency of Purchases†

American Economic Journal: Macroeconomics , Volume 13 (4) – Oct 1, 2021

Abstract

AbstractWe document a decline in the frequency of shopping trips in the United States since 1980 and consider its implications for the measurement of consumption inequality. A decline in shopping frequency as households stock up on storable goods (i.e., inventory behavior) will lead to a rise in expenditure inequality when the latter is measured at high frequency, even when underlying consumption inequality is unchanged. We find that most of the recently documented rise in expenditure inequality in the United States since the 1980s can be accounted for by this phenomenon. Using detailed micro data on spending, which we link to data on club/warehouse store openings, we directly attribute much of the reduced frequency of shopping trips to the rise in club/warehouse stores. (JEL D12, D31, D63, D91, E21)

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Publisher
American Economic Association
Copyright
Copyright © 2021 © American Economic Association
ISSN
1945-7715
DOI
10.1257/mac.20190115
Publisher site
See Article on Publisher Site

Abstract

AbstractWe document a decline in the frequency of shopping trips in the United States since 1980 and consider its implications for the measurement of consumption inequality. A decline in shopping frequency as households stock up on storable goods (i.e., inventory behavior) will lead to a rise in expenditure inequality when the latter is measured at high frequency, even when underlying consumption inequality is unchanged. We find that most of the recently documented rise in expenditure inequality in the United States since the 1980s can be accounted for by this phenomenon. Using detailed micro data on spending, which we link to data on club/warehouse store openings, we directly attribute much of the reduced frequency of shopping trips to the rise in club/warehouse stores. (JEL D12, D31, D63, D91, E21)

Journal

American Economic Journal: MacroeconomicsAmerican Economic Association

Published: Oct 1, 2021

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