Wealth and consumption inequalityan interquantile analysis

  1. Juan-Ignacio Martín-Legendre 1
  2. Pablo Castellanos García 1
  3. José Manuel Sánchez Santos 1
  1. 1 Universidade da Coruña
    info

    Universidade da Coruña

    La Coruña, España

    ROR https://ror.org/01qckj285

Journal:
Applied economic analysis

ISSN: 2632-7627

Year of publication: 2020

Volume: 28

Issue: 83

Pages: 133-151

Type: Article

DOI: 10.1108/AEA-04-2020-0026 DIALNET GOOGLE SCHOLAR lock_openOpen access editor

More publications in: Applied economic analysis

Sustainable development goals

Abstract

Purpose – The purpose of this paper is to analyze the changes in wealth and consumption inequality in Spain and estimate the consumption effects of housing and financial wealth. Design/methodology/approach – The estimations are made using micro-data from the Spanish Survey of Household Finances (2002–2014) applying cross-section, panel and interquartile techniques. Findings – The findings of this paper suggest that there was an increase in wealth inequality during the period under analysis and a reduction in consumption inequality. Also, the authors find a significant positive effect of wealth on consumer expenditure. Disaggregating by asset type, the value of the main residence is the category with the highest estimated effect on consumption, whereas the remaining types of assets, although still positive and generally significant, have more modest effects on consumption. However, the estimated coefficients and their significance can change substantially depending on the phase of the economic cycle and the position of the household in the income distribution. Originality/value – These results provide new empirical evidence on the effects of household wealth changes on their consumption behavior, the differences depending on the household’s position in the distribution and the fluctuations of these estimated coefficients throughout a period of profound economic upheavals.

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Funding information

This research was funded by the Consellería de Cultura, Educación e Ordenación Universitaria, Xunta de Galicia (ED481A-2016/356) and the Ministerio de Economía, Industria y Competitividad (Project CSO2017-86178-R).

Funders

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