Personal Consumption by Family Type and Household Income

Abstract Using Consumer Expenditure Survey data, this paper presents a unified approach in estimating adult personal consumption across five family types: married wage earners living together by themselves, married wage earners living together with their minor children, married retirees living together by themselves, single wage earning parents living together with their minor children, and single wage earners living alone. In addition to advancing the literature with a unified analysis of family traits, this paper uses over 700 microdata expenditure classifications instead of the approximate 30 summary expenditure classifications which have been relied on in other personal consumption studies. Microdata expenditure classification reduces problems of allocating expenses among family members. The paper begins with an overview of the Consumer Expenditure Survey, the federal data source that is most appropriate for estimating personal consumption. Next presented are the allocation rules to separate personal from survivor and household expenditures. The data are then identified followed by empirical estimation.