Viewpoint: Further Results on Measuring the Well-Being of the Poor Using Income and Consumption (Rsultats Additionnels Sur La Mesure Du Bien-Tre Des Pauvres En Utilisant Revenu Et Consommation)

36 Pages Posted: 14 Mar 2011

See all articles by Bruce D. Meyer

Bruce D. Meyer

University of Chicago - Irving B. Harris Graduate School of Public Policy Studies; National Bureau of Economic Research (NBER)

James X. Sullivan

University of Notre Dame - Department of Economics and Econometrics

Date Written: February 7, 2011

Abstract

We evaluate the relative merits of income- and consumption-based measures of well-being. Our results provide evidence that consumption better captures well-being for those with few resources. The bottom deciles of expenditures exceed those of income, suggesting under-reporting of income. The under-reporting rate for government transfers is high and rising. Overall non-response is more severe in U.S. income data than in expenditure data. Furthermore, a consumption data set requires fewer observations than an income data set to obtain the same level of precision for typical estimates. Finally, very low consumption is more strongly related to other bad outcomes than very low income.

(On value les mrites relatifs des mesures de bien-tre fondes sur le revenu et la consommation. Les rsultats montrent que la consommation mesure mieux le bien-tre de ceux qui ont peu de ressources. Les dciles au bas de la distribution des dpenses dpassent les dciles de la distribution des revenus ce qui suggre quil y aurait des revenus non rapports. Le taux de sous-dclaration des transferts gouvernementaux est lev et croissant. Le taux global de non-rponses est plus important aux Etats-Unis pour les revenus que pour les dpenses. De plus, les bases de donnes sur la consommation requirent moins dobservations que celles sur le revenu pour obtenir le mme degr de prcision des valuations typiques. Finalement, une trs basse consommation est plus fortement co-relie dautres mauvaises conditions quun trs bas niveau de revenu.)

Suggested Citation

Meyer, Bruce D. and Sullivan, James X., Viewpoint: Further Results on Measuring the Well-Being of the Poor Using Income and Consumption (Rsultats Additionnels Sur La Mesure Du Bien-Tre Des Pauvres En Utilisant Revenu Et Consommation) (February 7, 2011). Canadian Journal of Economics/Revue canadienne d'conomique, Vol. 44, Issue 1, pp. 52-87, 2011. Available at SSRN: https://ssrn.com/abstract=1784078 or http://dx.doi.org/10.1111/j.1540-5982.2010.01623.x

Bruce D. Meyer (Contact Author)

University of Chicago - Irving B. Harris Graduate School of Public Policy Studies ( email )

1155 East 60th Street
Chicago, IL 60637
United States
(773) 702-2712 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

James X. Sullivan

University of Notre Dame - Department of Economics and Econometrics ( email )

Notre Dame, IN 46556
United States

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