Real Consumption Inequality over the Last Half Century: Evidence Using the PSID Consumption Measure and Heterogeneous Inflation Rates

Abstract

This project investigates the evolution of real consumption inequality when we account for consumption-specific inflation rates but only have access to imperfect consumption data. Specifically, the project uses the Panel Study of Income and Dynamics and enhances Attanasio and Pistaferri’s (2014) imputation method for consumption in these data, and then applies Hochmuth, Pettersson and Weissert’s (2025) strategy to obtain household-level inflation rates. The resulting estimates provide new evidence on US real consumption inequality since the 1960s.