David S. Johnson

The Retirement Consumption Conundrum: Evidence from a Consumption Survey

Recent studies have shown that food consumption declines at retirement. We use broader definitions of consumption from the Consumer Expenditure Survey and find that the so-called retirement consumption puzzle is solved by using comprehensive consumption data.

Consumption Mobility in the United States: Evidence from Two Panel Data Sets

Abstract This paper examines inequality and mobility using measures of income and consumption. Consumption is claimed to be a better measure of permanent income and thus well-being, but most studies of inequality and mobility using U.S. data use income.This paper uses cohort data from the Consumer Expenditure Surveys on total consumption to impute consumption in the Panel Study of Income Dynamics. Then, we use this imputed consumption and actual income from the PSID to examine changes in inequality and mobility. Similar to earlier findings, we show that there has been a large increase in income inequality but no concurrent increase in consumption inequality in the 1990s. Conversely, income mobility and consumption mobility are similar during this time period.Finally, we link the concepts of inequality and mobility using a social welfare function. The results suggest that income mobility and consumption mobility more than offset the increases in inequality.

Is the Consumer Expenditure Survey Representative by Income

Aggregate under-reporting of household spending in the Consumer Expenditure Survey (CE) can result from two fundamental types of measurement errors: higher-income households (who presumably spend more than average) are under-represented in the CE estimation sample, or there is systematic under-reporting of spending by at least some CE survey respondents. Using a new data set linking CE units to zip-code level average Adjusted Gross Income (AGI), we show that the very highest-income households are less likely to respond to the survey when they are sampled, but unit non-response rates are not associated with income over most of the income distribution. Although increasing representation at the high end of the income distribution could in principle significantly raise aggregate CE spending, the low reported average propensity to spend for higher-income respondent households could account for at least as much of the aggregate shortfall in total spending.

Identifying the Poorest Older Americans

OBJECTIVES Public policies target a subset of the population defined as poor or needy, but rarely are people poor or needy in the same way. This is particularly true among older adults. This study investigates poverty among older adults in order to identify who among them is financially worst off. METHODS We use 20 years of data from the Consumer Expenditure Survey to examine the income and consumption of older Americans. RESULTS The poverty rate is cut in fourth if both income and consumption are used to define poverty. Those most likely to be poor defined by only income but not poor defined by income and consumption together are married, White, and homeowners and have a high school diploma or higher. The income poor alone display sufficient assets to raise consumption above poverty thresholds, whereas the consumption poor are shown to have income just above the poverty threshold and few assets. DISCUSSION The poorest among the older population are those who are income and consumption poor. Understanding the nature of this double poverty population is important in measuring the success of future public policies to reduce poverty among this group.

Are Children Worse off?: Evaluating Well-Being Using a New (And Improved) Measure of Poverty

Although child poverty rates continue to surpass those of others, there is growing consensus that current official poverty measure has become outdated and flawed. Using data from the Current Population Survey and the Survey of Income and Program Participation, we implement an experimental poverty measure based on recommendations by a National Academy of Sciences panel. We find that while child poverty rates continue to surpass those of others, the gap between child and adult poverty rates is smaller under the experimental measure. Results highlight the impact of noncash government benefits and the Earned Income Tax Credit in reducing child poverty.:

A general dependence test and applications

We describe a test, based on the correlation integral, for the independence of a variable and a vector that can be used with serially dependent data. Monte Carlo simulations suggest that the test has good power to detect dependence in several models, performing nearly as well or better than the BDS test in univariate time series and complementing the BDS test in distributed lag models. Finally, we apply our test in conjunction with the BDS test to examine models of US unemployment rates.

The Opportunities and Challenges of Using Administrative Data Linkages to Evaluate Mobility

Since Alan Krueger’s christening of the Great Gatsby curve, there has been increased attention given to the relationship between inequality and intergenerational social mobility in the United States. Studying intergenerational mobility (IGM) requires longitudinal data across large spans of time as well as the ability to follow parents and children over multiple generations. Few longitudinal datasets meet this need. This article surveys available data and the current and potential issues surrounding the use of administrative records to vastly extend the study of IGM. First, we describe the U.S. Census Bureau’s current uses of administrative records in the linkage of households across household surveys such as the Current Population Survey (CPS), American Community Survey (ACS), Survey of Income and Program Participation (SIPP), and the decennial censuses. Then, we describe the possibilities of creating additional parent-child linkages using the SIPP linked to decennial censuses and the ACS. Last, we outline our model to create linkages across earlier census data (e.g., 1980 and 1990) and contemporary surveys.

A Consistent Data Series to Evaluate Growth and Inequality in the National Accounts

Recent headlines frequently refer to rising inequality and its implication on economic growth and social welfare. Addressing the latter is difficult and requires more than simply looking at GDP, as Kuznets long ago pointed out. In this paper we focus on the importance of the income measure underlying the inequality measure when examining the relationship between GDP growth and inequality. We create a mapping using Census Bureau household survey data and Bureau of Labor Statistics (BLS) consumer expenditure data to create distributional measures of the Bureau of Economic Analysis (BEA) personal income. We show that for the period 2000-2012, inequality using personal income is substantively lower than inequality measured using Census Bureau money income, and the trends in both inequality and median income are different. This demonstrates the importance of using a measure a national accounts based measure of income when examining the relationships between inequality and growth.

Income Distribution and Inequality: Measurement Issues

This article is a revision of the previous edition article by A.B. Atkinson, volume 11, pp. 7265–7271,

Housing Costs in the CPI: What Are We Measuring?

The treatment of owner-occupied housing in the Consumer Price Index has long been a subject of confusion and consternation. Thus, a session to explore the issues was organized at the National Association for Business Economics Annual Meeting in Chicago on September 26, 2005.