# Is it possible for disposable income to be lower than consumption expenditure?

I have an issue dealing with dataset provided for my coursework.

Because of the fact that I've been failing to find time-series of the same or similar values anywhere from world bank to Office for National Statistics, I strongly doubt it.

The data series provided is shown below in a form of line chart. The brief provided says it's in constant prices, it unfortunately does not indicate the reference year. What it is supposed to describe is consumption and disposable income for the United Kingdom over the period of 03Q2 to 15Q4. I don't believe there would be negative savings for the whole period.

I have been looking around to find some hint that would prove this true, unfortunately the graph below shows the opposite. I can explain the jump in disposable income by change in reference year, however the consumption data does not make sense to me. At all.

• second graph shows overall income vs consumption while the first graph has disposable income. Also, the second graph has completely different timeline. May 17, 2016 at 6:05
• Definitely looks unlikely that you could have disposable income being 10% ir so below consumption for years on end. There's probably something wrong... Jul 18, 2016 at 3:36
• If disposable income is income after taxes and transfers then a big part of the difference could be tax-funded health care expenditures which are part of consumption but not in disposable income because they are tax funded.
– BKay
Aug 16, 2016 at 22:57

the first graph is 1970-2003, the second is 2003-2015

Data is never "wrong", data simply is. It can be wrongly collected, but it is nevertheless. Now, what you are seeing is probably due to

(a) differences in vintages or definitions (SNA changed between 1993 and 2008)

(b) problems in your definitions - e.g. inconsistent definitions

To provide a better answer I would need to know the SNA code for each series and where the data comes from.

Finally, please do check the statistical definitions underlying the data your using. Assuming it is National Accounts (SNA stands for System of National Accounts, the basis for both ESA, NIPA and other systems), please do check chapters 8 and 9 of SNA 2008 for the proper statistical definitions.

(As I cannot yet comment, this has to be posted as an answer)

PS: IMHO would suggest "data" and/or "empirics" as opposed to "Keynesian economics" as a tag