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Refining Real Consumption : Accounting for In-Kind Transfers, Imputed Rents, and Preference Heterogeneities

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  • ABE, Naohito
  • INAKURA, Noriko

Abstract

Over the past decade, expanded government in-kind transfers such as healthcare and education have influenced household welfare in many countries. To capture their effects on consumption inequalities, this study introduces an acquisition-based consumption measure that includes in-kind transfers and imputed rents, deflated using a superlative index. Using Japanese data from 2005 to 2021, we find that while conventional measures indicate an 11.2 percent decline in consumption among younger households, our index shows a 6.3 percent increase. Of the resulting 17.5 percentage-point gap, 10.7 points come from the deflator choice, while the rest arises from including in-kind transfers and imputed rents.

Suggested Citation

  • ABE, Naohito & INAKURA, Noriko, 2025. "Refining Real Consumption : Accounting for In-Kind Transfers, Imputed Rents, and Preference Heterogeneities," RCESR Discussion Paper Series DP25-1, Research Center for Economic and Social Risks, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:rcesrs:dp25-1
    Note: 6 January, 2025
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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