Consumption vs. income inequality, revisited

Marginal Revolution: Consumption vs. income inequality, revisited

…Keep in mind a few points:

1. Global income inequality is way down over the last thirty years.

2. Inequality of welfare, even within the United States, is way down over long time horizons, such as the last century.

3. We do not know how inequality of welfare in America is faring over say the last thirty years. …

4. We do know that welfare inequality doesn't track income inequality in any simple way, especially when new goods are being introduced, there is mass production, there is diminishing marginal utility, and non-marketed benefits and costs are important in human life.

5. Here is the latest and most serious attempt to weigh the problems with consumption data; overall it reinforces the importance of looking at consumption.  And it is not denied that consumption inequality is much less than income inequality and also consumption inequality rising less rapidly over time.