The Curious Incident of Luxury Imports During the Top-Income Surge

Abstract

Atkinson, Piketty, and Saez [2011] find a post-1979 surge in taxfiler top income shares in “English speaking countries” (surge countries) but not in “continental European countries and Japan” (no-surge countries). We find the puzzle that Comtrade import-to-GDP ratios and import-to-total-import ratios for apparent luxuries pearls, precious stones, diamonds, works of art, jewellery, furs and coins do not increase post-1979 in surge countries relative to no-surge countries. Explanations could include issues with the taxfiler or import data or that top income individuals do not have a particularly high marginal to propensity to consume these luxury goods, at least within their own country. Overall, this is a fragment of evidence that there may not have been a large post-1979 increase in top-end domestic consumption inequality in surge countries compared to no-surge countries.

Keywords: income distribution, taxfiler data, luxury goods

JEL Classification: D12, D31, D63, F19, N30