On Inequality in Consumption Expenditures. The Case of Switzerland

This study attempts to analyze inequality in consumption on the basis of a method where ENGEL elasticities are derived from Concentration Curves. The idea is to apply the traditional decomposition of the GINI index by income sources to the analysis of the impact of the various consumption categories on overall inequality in consumption. Such an approach allows one to estimate the elasticity of the overall GINI index of inequality in consumption with respect to each of the consumption categories and thus to derive policy implications concerning the effect of changes in indirect taxes or in subsidies. By breaking down the population into poor and rich household one is also able to analyze the specific impact of such policy changes on these two subgroups. A distinction may then be made between policies aimed at reducing overall inequality, poverty or poverty among the very poor. Throughout the study the methodology is applied to consumption expenditures data provided by the 1990 Swiss Consumption Survey.