What do we spend money on? Consumption patterns and tax

At the centre of politics is 'the big trade-off': where to strike the balance between collective goods and social spending, financed through taxation, and private consumption. 

One side of this trade-off has been extensively documented in international comparisons of the relationship between the level of welfare provision and the level of taxation. 

This project will fill the evidence gap by looking at the other side of the trade-off by answering some key questions:

  • What is it that citizens in countries with lower taxation levels spend their extra take-home income on?
  • What is that people in the UK are able to spend more on than, say, citizens of France or Denmark, as a result of our collective decision to have less extensive social provision? 
  • Conversely, what are the citizens in other countries apparently sacrificing to enable higher public spending?
Project details



Professor John Hills, LSE

Funding programme:

Open door

Grant amount and duration:


June 2011-February 2014



Francesca Bastagli and John Hills (2013).  What Gives? Household consumption patters and the 'Big Trade Off' with Public Consumption.  Working Paper 170