Working Paper: NBER ID: w23357
Authors: Olivier Coibion; Yuriy Gorodnichenko; Dmitri Koustas
Abstract: We document a decline in the frequency of shopping trips in the U.S. since 1980 and consider its implications for the measurement of consumption inequality. A decline in shopping frequency as households stock up on storable goods (i.e. inventory behavior) will lead to a rise in expenditure inequality when the latter is measured at high frequency, even when underlying consumption inequality is unchanged. We find that most of the recently documented rise in expenditure inequality in the U.S. since the 1980s can be accounted for by this phenomenon. Using detailed micro data on spending which we link to data on club/warehouse store openings, we directly attribute much of the reduced frequency of shopping trips to the rise in club/warehouse stores.
Keywords: Consumption Inequality; Shopping Frequency; Expenditure Inequality; Club Warehouse Stores
JEL Codes: D31; D63; E21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increase in expenditure inequality (D31) | higher expenditure dispersion at weekly frequencies (E21) |
| higher expenditure dispersion at weekly frequencies (E21) | increased spending at club stores (L81) |
| decline in shopping frequency (L81) | increase in expenditure inequality (D31) |
| rise of club warehouse stores (L81) | decline in shopping frequency (L81) |
| changes in shopping frequency (D12) | rise in measured expenditure inequality since the 1980s (D31) |