Following THIS POST using census data, Tim Worstall suggested the data include more than income. He cited the Tax Foundation study as an example of a study that attempted to address what the authors saw as a more accurate picture when describing “living in poverty” (by including transfer payments and benefits of spending in ‘standard of living’).
In general, federal government spending is more sharply tilted toward lower-incomehouseholds, due to the large amount of federal transfer payments to lower-incomehouseholds through Social Security, Medicare and Medicaid. State and local spending isgenerally more flatly distributed across income groups with the largest dollar amountstargeted at the highest income quintile. This is largely due to high state and localgovernment spending on programs that are disproportionately used by middle- and upperincomehouseholds. These include public education that is heavily utilized by upperincomegroups with the largest total numbers of children enrolled in public elementaryand secondary schools, highways that are disproportionately used by upper-incomehouseholds with the most vehicles, and interest payments on government debt thatdisproportionately fall on upper-income households who hold government bonds.25Note that the government spending amounts in Figure 4 include government spending onpublic goods such as environmental protection, public health, and national defense, aswell as spending on private goods and transfer payments. Because of the nonrivalrousand nonexcludable nature of public goods, in the current study spending on public goods…..As can be seen from the table, the exclusion of public goods does not change the overalldistribution of government spending, but reduces the amount of government spendingreceived per household in every quintile by an equal amount. In 2004, total governmentspending on public goods was roughly $8,150 per household—$6,059 in federal spendingand $2,090 in state and local spending.Figure 5 presents the share of government spending received by each income quintile.Households in the two lowest income quintiles receive the largest shares of totalgovernment spending, together accounting for 51.4 percent of total spending. This resultis largely driven by spending on government transfer payments to elderly households—many of whom reside in the lower income quintiles—and other government aid to lowincomehouseholds. Households in the fourth quintile receive the smallest share of total government spending, at 14.8 percent.
Utility and value are excluded from the the purview of this paper but acknowleged. I think the quote nails down the gist of the distribution, and found it interesting. Obviously the paper leaves out a lot of detail. If it does, I need help in looking at the explanations. At first glance the inclusion of Social Secuity bothers me. I found they did not exclude SS to compare across quintiles (unless I missed it.)
What would be the advantages of tracking the money, and disadvantages? Currently the big black box takes care of flow.
I did not follow some of the details of the evaluation, but I think I found the central component. If not, correct me.
Update: Change the “Tim Worstall cited” to a more accurate “mentioned as first study to address the issue when searching”.