Consumption Inequality and the Frequency of Purchases

Olivier Coibion, Yuriy Gorodnichenko and Dmitri Koustas

No 23357, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We document a decline in the frequency of shopping trips in the U.S. since 1980 and consider its implications for the measurement of consumption inequality. A decline in shopping frequency as households stock up on storable goods (i.e. inventory behavior) will lead to a rise in expenditure inequality when the latter is measured at high frequency, even when underlying consumption inequality is unchanged. We find that most of the recently documented rise in expenditure inequality in the U.S. since the 1980s can be accounted for by this phenomenon. Using detailed micro data on spending which we link to data on club/warehouse store openings, we directly attribute much of the reduced frequency of shopping trips to the rise in club/warehouse stores.

JEL-codes: D31 D63 E21 (search for similar items in EconPapers)
Date: 2017-04
New Economics Papers: this item is included in nep-mac and nep-ure
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Citations: View citations in EconPapers (12)

Published as Olivier Coibion & Yuriy Gorodnichenko & Dmitri Koustas, 2021. "Consumption Inequality and the Frequency of Purchases," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(4), pages 449-482, October.

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Working Paper: Consumption Inequality and the Frequency of Purchases (2022)
Journal Article: Consumption Inequality and the Frequency of Purchases (2021)
Working Paper: Consumption Inequality and the Frequency of Purchases (2017)
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