Journal Article

Income Inequality and Income-Class Consumption Patterns


Abstract: This Commentary investigates whether there has been a growing divergence in the consumption of luxury and necessity goods across income classes. The analysis shows that while necessities represent a majority of the consumption basket for lower and middle income quintiles, their consumption of necessities in inflation-adjusted dollars has been declining in the face of higher prices of such goods and stagnant income growth. Higher income quintiles have seen increases in their consumption of luxuries, simultaneous with a decline in their consumption of necessities.

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File(s): File format is text/html https://doi.org/10.26509/frbc-ec-201418
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Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Commentary

Publication Date: 2014

Issue: Oct

Order Number: 18