This study presents estimates of multidimensional household inequality in Australia from 2001 to 2017. Earnings inequality declines through the sample, while disposable income, non-durable consumption expenditures, food expenditures and net worth inequality exhibit relatively flat trends. The relatively flat trend for non-durable expenditures inequality, 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, but coefficient estimates have small magnitudes, confirming standard tests.
Bibliographical noteFunding Information:
This article uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The HILDA Project was initiated and is funded by the Australian Government Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) and is managed by the Melbourne Institute of Applied Economic and Social Research. The findings and views reported in this article, however, are those of the authors and should not be attributed to either FaHCSIA or the Melbourne Institute. We gratefully acknowledge Simon Angus, Jun Sung Kim, Ranjan Ray, Russell Smyth, Alan Tapper, Rebecca Valenzuela, and participants at 2019 Annual Conference of Western Economic Association International, including our discussant Christos Shiamptanis for helpful comments. Moonju Cho provided excellent research assistance.
All Science Journal Classification (ASJC) codes
- Business and International Management
- Economics, Econometrics and Finance(all)
- Political Science and International Relations