[Private And Public Consumption Across Generations In Australia]

James M Rice, Jeromey B Temple, and Peter F McDonald, "Private And Public Consumption Across Generations In Australia", Australasian Journal On Ageing, 36(4), December, 2017, pages 279-285.

Abstract

Objective: To investigate intergenerational equity in consumption using the Australian National Transfer Accounts (NTA).

Methods: Australian NTA estimates of consumption were used to investigate disparities in consumption between people of different ages and generations in Australia between 1981-1982 and 2009-2010.

Results: There is a clear patterning of consumption by age, with the distribution by age of consumption funded by the private sector being very different to that of consumption funded by the public sector. Australians have achieved notable equality in total consumption among people between the ages of 20 and 75 years. Substantial disparities exist, however, between different generations, with earlier generations experiencing lower levels of total consumption in real terms at particular ages than later generations.

Conclusion: An accurate picture of intergenerational equity in consumption requires consideration of both cohorts and cross sections, as well as consumption funded by both the public and the private sectors.

Policy Impact: This investigation of consumption has implications for debates about the intergenerational equity of policy settings in Australia's ageing population. It sounds warnings for future research concerning: (i) the importance of distinguishing "cross-sectional" and "cohort" perspectives on consumption and intergenerational equity; and (ii) the importance of consumption funded by the public sector.

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