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Office of Survey Methods Research
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Published Year: 2024
Survey/Program(s): Office of Prices and Living Conditions
Catalog: Economic Working Paper
WP Number: WP-573
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Consumption Inequality During and After the COVID-19 Pandemic
Abstract
In this paper we study consumption inequality before, during, and after the COVID-19 pandemic. Our consumption measure uses data from the U.S. Consumer Expenditure Surveys augmented with additional data and imputations. We compare consumption to a measure of expenditures defined by outlays. We find that consumption inequality declined from 2019 to 2020 before increasing in 2021 and 2022. By 2022, consumption inequality was similar to 2019 levels. Outlay inequality follows a similar pattern but is less equal in 2022 compared to 2019. To better understand the drivers behind this change, we decompose the Gini coefficient by category of consumption and decompose the Theil index by household demographic characteristics. We find that the decline in overall inequality in 2020 was due to shifts away from the consumption categories that were most impacted by the pandemic, which reversed in 2021 and 2022.