Inequality of Spanish household expenditure for the 2006-2016 period- are we converging?

Abstract

The depth and persistence of the Great Recession that started in 2008 had a considerable impact on income distribution and inequality. Therefore, studies of living standards and evolution of income inequality are trend topics nowadays. Our goal was to estimate the impact of the economic crises on household expenditure and the trends and evolution of regional inequality. We applied our analysis to the Spanish case based on Household Budget Survey data from Instituto Nacional de Estadística (INE, the National Statistics Institute) and the period of eleven years between 2006 and 2016. A model that showed good results in modelling income was the biparametric gamma model, which is further very useful to estimate inequality. First, we tested the validity of the model, which allowed us to obtain the inequality data. Second, we extended our analysis studying the evolution of inequality, as well as household living standards, by examining the impact of the Great Recession on household expenditures. For the second part of the paper, we conducted longitudinal and transversal studies. The main results show that, in general, expenditure inequality reduces during the period studied. Moreover, given that average spending decreases in most regions, the tendency is for them to equalize on the downside, especially for the period of the economic crisis (2008-2013). © 2019 Institute of Economics, Ural Branch of the Russian Academy of Sciences. All rights reserved