In the U.S., how much higher is the average consumer spending of the poorest 10% of households than their reported, before-tax, cash income?
In the U.S., the poorest 10% of households have average annual reported, before-tax, cash income of $6,063, while their average consumer spending is $23,705. This means their spending is 3.9 times or 291% higher than their income. This difference is mainly due to unreported income. Per the Journal of Human Resources, "substantial evidence" indicates that consumption data is more accurately "measured than income for those with few resources" and provides policymakers with better information to decide "on appropriate benefit amounts for programs such as Food Stamps."
DocumentationConsumption and Income