We differentiate consumption from expenditure by incorporating price search decision into an otherwise standard life‐cycle model. We first analytically show that, under very general conditions, poorer households search more and pay lower prices compared to wealthier ones. As a result, consumption inequality is smaller than expenditure inequality, and the gap between them increases over the life‐cycle. Next, using a plausibly calibrated model, we find that life‐cycle increase in consumption inequality is about 30% lower than the increase in expenditure inequality. Price search provides an insurance mechanism against income shocks and increases the welfare of a newborn by 3.9%.

中文翻译：

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生命周期内的价格搜索，消费不平等和支出不平等

通过将价格搜索决策纳入其他标准生命周期模型，我们将消费与支出区分开。我们首先分析性地表明，在非常普遍的条件下，与较富裕的家庭相比，较贫穷的家庭搜索更多，支付的价格更低。结果，消费不平等小于支出不平等，两者之间的差距在整个生命周期中不断扩大。接下来，使用合理的校准模型，我们发现消费不平等的生命周期增长比支出不平等的增长低约30％。价格搜寻提供了一种防止收入冲击的保险机制，并将新生儿的福利提高了3.9％。