Household Inequality and Risk Sharing in Australia
Global Economic Review (2020), https://doi.org/10.1080/1226508X.2020.1862692
39 Pages Posted: 5 Mar 2016 Last revised: 30 Dec 2020
Date Written: November 11, 2020
This study presents estimates of multi-dimensional household inequality in Australia from 2001-2017. Household earnings inequality declines through the sample, while inequality for household disposable income, non-durable consumption expenditures, food expenditures and net worth exhibits little change. The relatively unchanging non-durable consumption expenditures, even over the life cycle, suggests households insure consumption against idiosyncratic shocks. Standard regression estimates of consumption growth against income shocks confirm this finding. Quantile regression estimates indicate households experiencing negative (positive) consumption growth have more sensitivity to negative (positive) income shocks than households with positive (negative) consumption growth, although coefficient estimates have small magnitudes.
Keywords: Consumption inequality; Earnings inequality; Household inequality; Wealth inequality; Quantile Risk Sharing
JEL Classification: D31, D33, D81, E21, H24
Suggested Citation: Suggested Citation