Smphony Orchestras and consumption baskets

Tyler Cowen points to the financial distress in upper echelons of music industry in his post Symphony orchestras and sectoral shifts — Marginal Revolution. I brings an important point to fore. We need to have a different consumption basket for different income class.

While the financial crisis unfolded, and as it continues, we see marked difference in the consumption behavior across income class. Alas we do not have data to support this. I venture the consumption basket of lower income class has seen inflation (relatively speaking with constant or slightly increasing prices and declining wages). 

Similarly, the consumption basket of the rich has undergone changes too. The discretionary consumption expenses should have reduced. Discretion, however, means different things to different income classes. For the rich, it may mean no symphonies and operas. However, consumption may not include cars or other items.

At the least, we should construct consumption basket across income classes through credit card data. It will give important insights for policy makers.

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