This thesis consists of essays examining the relationship between income and consumption in Ireland. If people with ‘rational expectations’ can freely borrow or save then ‘lifetime income’ or consumption is a more accurate measure of the distribution of household resources than current income. However, a number of issues such as measurement error in income and expenditure, formation of expectations and the relative importance of permanent and transitory shocks to income all pose challenges to anyone wishing to understand how households smooth consumption over income peaks and troughs to maintain living standards. I will examine some of these issues identified in the research in the Irish context through an analysis of household survey microdata.