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Publication year
Consumption Inequality and Partial Insurance
Resource type
Authors/contributors
- Blundell, Richard (Author)
- Pistaferri, Luigi (Author)
- Preston, Ian (Author)
Title
Consumption Inequality and Partial Insurance
Abstract
This paper examines the link between income and consumption inequality. Wecreate panel data on consumption for the Panel Study of Income Dynamics usingan imputation procedure based on food demand estimates from the ConsumerExpenditure Survey. We document a disjuncture between income and consumptioninequality over the 1980s and show that it can be explained by changes inthe persistence of income shocks. We find some partial insurance of permanentshocks, especially for the college educated and those near retirement. Wefind full insurance of transitory shocks except among poor households. Taxes,transfers, and family labor supply play an important role in insuring permanentshocks. (JEL D12, D31, D91, E21)
Publication
American Economic Review
Volume
98
Issue
5
Pages
1887-1921
Date
2008-12
Citation
Blundell, R., Pistaferri, L., & Preston, I. (2008). Consumption Inequality and Partial Insurance. American Economic Review, 98, 1887–1921.
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