Measuring and Comparing Consumption Inequality between France and the United States

44 Pages Posted: 24 Jan 2023

See all articles by Aliocha Accardo

Aliocha Accardo

affiliation not provided to SSRN

Sylverie Herbert

Banque de France

Cristina Jude

Banque de France - Economic Study and Research Division; University of Orleans - Laboratoire d'économie d'Orléans

Adrian Penalver

Banque de France

Date Written: January 2023

Abstract

This paper constructs an annual dataset of consumption by income quintiles for France since 1989 in order to make a granular comparison of consumption inequality with the United States. First, we match consumption data from a survey run every five years with the national accounts, and then use a Kalman filter to interpolate missing observations, leveraging the yearly national accounts data to improve the performance of the Kalman filter. We validate this technique by applying it to a US dataset with pseudo-missing data comparable with our French data. Second, we construct a US consumption dataset compatible with the French classification of consumption items and compare consumption inequality trends between the US and France. We find consumption inequality to be overall lower than income inequality, and not to follow the dynamics of income inequality. Consumption inequality is also higher in the US than in France. Finally, based on the weights of the different consumption items, we construct annual consumption deflators by quintiles. We find that dispersion in price pressures across income groups is less marked in France than in the United States, and overall quite small in both countries.

Keywords: Inequality, Consumption, Income, Inflation

JEL Classification: D31, E21, E31

Suggested Citation

Accardo, Aliocha and Herbert, Sylverie and Jude, Cristina and Penalver, Adrian, Measuring and Comparing Consumption Inequality between France and the United States (January 2023). Banque de France Working Paper No. 904, Available at SSRN: https://ssrn.com/abstract=4336389 or http://dx.doi.org/10.2139/ssrn.4336389

Aliocha Accardo

affiliation not provided to SSRN

Sylverie Herbert (Contact Author)

Banque de France ( email )

31 rue Croix des Petits Champs
Paris, NY 75001
France

Cristina Jude

Banque de France - Economic Study and Research Division ( email )

31, rue Croix des Petits Champs
75049 Paris Cedex 01
France
+33142977735 (Phone)

University of Orleans - Laboratoire d'économie d'Orléans ( email )

Rue de Blois BP6739
Orléans cedex 2, Centre 45067
France

Adrian Penalver

Banque de France ( email )

Paris
France

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