1 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Consumption Inequality During and After the 

COVID-19 Pandemic

Brett Matsumoto

Co-authored with Thesia I Garner and Jake Schild

2024 ASSA Annual Meeting

January 6, 2024

Advancements in Measuring Income, Consumption, and Poverty 2:30 – 4:30 pm
2 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

COVID and Consumption Inequality

◼ COVID greatly impacted the economy

Sudden shutdown in March 2020

Shift in types of expenditures, as some types of spending was more 

affected than others

Unprecedented fiscal response

◼ Consumption inequality fell in 2020 before recovering in 2021 

and 2022.

The decline was driven by declining consumption in pandemic sensitive 

categories of consumption among those at the top of the distribution.
3 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Unemployment Rate

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

2019 Dec

2020 Jan

2020 Feb

2020 Mar

2020 Apr

2020 May

2020 Jun

2020 Jul

2020 Aug

2020 Sep

2020 Oct

2020 Nov

2020 Dec

2021 Jan

2021 Feb

2021 Mar

2021 Apr

2021 May

2021 Jun

2021 Jul

2021 Aug

2021 Sep

2021 Oct

2021 Nov

2021 Dec

2022 Jan

2022 Feb

2022 Mar

2022 Apr

2022 May

2022 Jun

2022 Jul

2022 Aug

2022 Sep

2022 Oct

2022 Nov

2022 Dec
4 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

TSA Passenger count, 7-day MA

0

0.5

1

1.5

2

2.5

Millions of Passengers
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Overview

◼ Construction of our consumption measure

◼ Inequality results from 2019-2022

◼ Examine drivers of change in inequality

Gini decomposition by type of consumption

Theil decomposition by demographic groups

◼ Conclusion and future work
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Consumption Measure: Methods and Data
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Consumption as a Well-being Outcome: 

A Function of Resources and Processes

Available Resources

Income, in-kind 

transfers (private & 

public)

Asset (financial)

Asset (nonfinancial)

Debt (access and 

use)

Time

Processes

Skills (e.g., education, 

financial management, 

efficiency in converting 

inputs to outcomes)

Degree of resource 

allocation (power)

Circumstances (CU 

composition, disability)

Preferences

Outcomes (e.g.,)

1. Consumption

2. Health status

3. Material deprivation

4. Life satisfaction

5. Happiness
8 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Why Produce Consumption Measures?

◼ Alternative measure of well-being based on outcomes

 Supports work and recommendations 

– CNSTAT Panel An Integrated System of U.S. Household Income, Wealth, and Consumption Data and Statistics to 

Inform Policy and Research (present)

– OECD expert groups on distributions of income, consumption, and wealth (micro groups)

 Allows us to go beyond expenditures: Period of COVID-19 and consumption of home production

◼ Poverty and Inequality measurement

 Supports the work of the Interagency Technical Working Group (ITWG) on Evaluating Alternative 

Measures of Poverty (2020) 

 Builds on work presented at APPAM 2022

 Follows along with the CNSTAT panel (2023) focus on consumption needs for the Principle Poverty 

Measure

❖ In addition, have presented earlier work on progressions of our measure and used in inequality and poverty at 

various venues (e.g., ASSA, SGE, OECD, CNSTAT, FESAC, JSM, SEA). See Monthly Labor Review 2022 for details 

about comprehensive consumption measure
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Consumption Expenditures vs Consumption: Key differences

◼ Durables – expenditure vs flow of services 

◼ In-kind transfers

◼ Household Production

◼ Gifts and barter

◼ Problem categories (investment vs consumption):

Education

Health
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Economic Well-being at 

Consumer Unit Level

Consumption

Without 

Health 

Insurance

with Health 

Insurance

with Health 

Insurance 

Capped

Concepts of Consumption for Poverty Analysis

NOTE: None of these measures include “Education”

HI_Cap=

min(HI, 0.5*consumption with HI)
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Data and Methods

◼ Data

Base is U.S. Consumer Expenditure Survey Interview, 2019 

through 2022

Assuming independent quarters 

Supplemented with data from CPS-ASEC, MEPS Insurance 

Component, CMS National Health Expenditure Database, 

USDA Administrative Data, National Center for Education 

Statistics 
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Methods

◼ Gini decomposition by type of consumption (Lerman and 

Yitzhaki 1985):

G = ෍

g

GgRgSg

Gg: Within category Gini

Rg: Correlation with rank of overall consumption

Sg: Share of overall consumption
13 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Methods

◼ Theil decomposition by demographic group: within vs across 

group inequality

Theil = ෍

k

sk ∗ Theilk + ෍

k

sk log

ckҧ

cҧ

sk =

ckҧnk

cҧn

– sk is the share of consumption represented by group k

– nk number in group k

– ckҧ mean consumption for group k and cҧis overall mean consumption
14 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Results
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Over Time: Quarterly Equivalized Means and Medians

◼ Small declines in real mean 

and median consumption in 

2020.

◼ Large impact of inflation on 

2021 and 2022 nominal 

values.

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

2019 2020 2021 2022

Median Mean

Real Median (2019 dollars) Real Mean (2019 dollars)
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Consumption and post-tax income Gini

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

2019 2020 2021 2022

Consumption and Post-tax income inequality

Gini - Consumption Gini - Census Post-tax income

-6.00%

-5.00%

-4.00%

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2019 2020 2021 2022

Change in Gini since 2019

Gini - Consumption Gini - Census Post-tax income
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Inequality Measures

2019 2020 2021 2022

Consumption with Health Capped

Gini 0.250 0.241 0.246 0.248

(0.003) (0.003) (0.004) (0.004)

Theil 0.110 0.102 0.107 0.108

Mean log deviation 0.104 0.098 0.101 0.102

Consumption with Health Uncapped

Gini 0.248 0.239 0.244 0.246

(0.003) (0.003) (0.004) (0.004)

Theil 0.108 0.101 0.106 0.106

Mean log deviation 0.102 0.097 0.100 0.101
18 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Gini contribution over time

-0.05

0

0.05

0.1

0.15

0.2

0.25

0.3

2019 2020 2021 2022

COVID sensitive

Food at home

Primary Shelter

Transportation flows

Apparel

Health insurance

In-kind benefits

Other
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Contributions to the 1 year change in Gini

-0.025

-0.02

-0.015

-0.01

-0.005

0

0.005

0.01

0.015

0.02

0.025

2020 2021 2022

COVID sensitive

Food at home

Primary Shelter

Transportation flows

Apparel

Health insurance

In-kind benefits

Other
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Drivers of the change in Gini contribution by category

◼ Covid sensitive categories tend to have:

High within category Gini and high rank correlation

◼ From 2019 to 2020:

Shares declined in covid sensitive categories offset by increases in 

other categories

Rank correlation and within Gini are relatively stable

Results is the shift in consumption patterns leads to lower overall 

inequality
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Demographic decomposition

2019 2020 2021 2022

Aggregate Inequality (Theil) 0.110 0.102 0.107 0.108

Family Type

Within-group inequality share 83.5% 84.5% 86.0% 85.5%

Between-group inequality share 16.5% 15.5% 14.0% 14.5%

Economic activity of household head

Within-group inequality share 95.1% 94.5% 96.0% 95.8%

Between-group inequality share 4.9% 5.5% 4.0% 4.2%
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Conclusion and Next Steps
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Conclusion

◼ Consumption inequality fell in 2020 before partially recovering 

in 2021 and 2022.

Similar pattern to post-tax income inequality

◼ Gini decomposition results: decline in 2020 inequality due to 

declines in consumption in the most covid sensitive categories.

◼ Theil decomposition: decline in between group inequality share 

by family type over this period
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Future work

◼ Improvements and updates to the consumption measure

Incorporate home production

Add diary expenditures

Top tail adjustment

Adjusting the health insurance cap

◼ Add after tax income measure

◼ Inequality and poverty analysis

Further analysis of demographic results

Estimate impact of specific policies
Contact Information

25 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Brett Matsumoto

Division of Price and Index Number 

Research

www.bls.gov/pir

https://www.bls.gov/cex/consumptionhome.htm

matsumoto.brett@bls.gov