Household wealth, public consumption and economic well-being in the United States

Edward N. Wolff, Ajit Zacharias, Asena Caner
2005 Cambridge Journal of Economics  
Standard official measures of household economic well-being in several countries are based on money income. The general consensus is that such measures are limited because they ignore certain crucial determinants of well-being. We examine two such determinantshousehold wealth and public consumption-in the context of the United States. Our findings suggest that the level and distribution of economic well-being is substantially altered when money income is adjusted for wealth or public
more » ... r public consumption. Over the 1989-2000 period, median well-being appears to increase faster when these adjustments are made than when standard money income is used. Adding imputed rent and annuities from household wealth to household income increases measured inequality while adding public consumption reduces it. However, all three measures show about the same rise in inequalilty over the period.
doi:10.1093/cje/bei076 fatcat:gjnsfe4dgjdsxbaqbo3nj7z3wa