fishing and other fees, rent and food in-kind from work, and expenditures for automobile
insurance. All of these are considered current consumption for our study and were added to the
Spanish bundle as well.
Expenditures for the acquisition of vehicles for private transportation, house maintenance
and repairs, and life insurance are considered to be more of a form of savings than current
consumption. Thus, they are excluded for the analysis. Expenditures for housing (rent for
renters and some type of rental equivalence for owners, as well as utilities), and health and
vehicle insurance are included. In addition, for the U.S., adjustments are made to account for the
flow of services from selected household durables (see Cage et al. 2002).
However, some differences in the Spanish and U.S. definition of household consumption
expenditures remain. For example, it is known that in both countries health care and education
are consumed by the population; however, households may or may not pay for these consumption
services and related goods, or they may pay relatively little. This is of particular importance when
making international comparisons when one country has national health insurance, for example,
and the other does not, as is the case with Spain and the U.S. To include the household’s
expenditures for the U.S., and not the comparable expenditures made by Spanish households and
the government on the part of Spanish households means that an item like health care (and its
value) in Spain will be underestimated. About 2.28 percent of total expenditures for Spain are for
out-of-pocket health expenditures. This is in contrast to the share for the U.S. that is about 7
percent. Included in the Spanish measure, however, but not the U.S. one are (i) cash
contributions to non-profit institutions and cash transfers to members of the household who are
not living at the residence
(for example, college students), as well as (ii) the value of home
. As noted in the main part of the paper, cash transfers are not collected each quarter
in the CE data so they could not be included in the U.S. total. No information is collected in the
CE on home production. However, when these last two sets of expenditures are excluded, the
overall results with respect to inequality and social welfare in Spain as compared to the U.S.
change very little
Cash contributions to non-profit institutions and to persons not living in the household data are only collected in
the fifth quarter of the CE Interview. Our sample includes households who may not have a fifth interview; based on
this, expenditures were defined so that they would be the same across all quarters covered. Thus, these contributions
are not included in the U.S. definition of current consumption expenditures.
Home production includes self-consumption and self-supply. Self-consumption is defined to be goods (mainly
food) produced on one’s own farm, in one’s own factory or workshop, or by one or some member of the household.
These goods are consumed by household members or given as gifts to others not of this household during the
reference period. These goods are valued at local retain market prices.
When the overall inequality (I
) results were produced for each
with cash transfers and home production not
included, the sign of the U.S.- Spanish differences did not change. However, expenditure inequality in Spain
increased marginally with the exclusion of these expenditures. When
= 0.0, the overall inequality index value
was 0.171 (versus 0.166), when
= 0.3, the index was 0.149 (versus 0.145), when
= 0.5, the index was 0.143
(versus 0.139), when
= 0.7, the index was 0.143 (versus 0.140), and when
= 1.0, the index was 0.158 (versus