The Asymmetric Impact of Income Inequality on the Relative Consumption of Market and Non-Market Goods
18 Pages Posted: 8 Dec 2012
Date Written: December 6, 2012
Abstract
Increasing income inequality has an asymmetric impact on society. Affluent households consume both more market and non-market goods. Middle-class households however, in order to minimize utility loss, must substitute away non-market goods in an effort to maintain proportional consumption of market goods. Utilizing standard Cobb-Douglas utility functions this paper models the resulting asymmetric impact on affluent and non-affluent households. Census data is then used to test these conceptual results within the context of urban sprawl.
Keywords: Income Inequality, Consumerism, Sprawl
JEL Classification: D10, D63, R10
Suggested Citation: Suggested Citation
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