Abstract
The sixth chapter examines how consumption per capita tends to track income per capita across countries and within individual countries with diverse income levels and cultures. It discusses the Life-Cycle Hypothesis concerned with the maximisation of consumption during the life-cycle. It also illustrates life-cycle hump-shaped trends. It raises conceptual and measurement issues including household-size equivalence measures. These issues include the question of cross-sectional findings and longitudinal trends and the use of pseudo panels. It examines issues related to consumption and savings in old age and differential mortality. It then reviews empirical findings related to household size, employment, work-related expenditures, durable and non-durable goods related to consumer behaviour. Finally, it assesses factors affecting consumer behaviour in retirement, a growing demographic trend, including credit/liquidity constraints, income and life expectancy uncertainty, bequest motives, leisure choices and unanticipated shocks.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
The few outliers in Fig. 6.1 are usually small countries with special characteristics such as Macau (China) or oil-producing countries in the Middle East.
- 2.
A considered review of some theoretical and measurement issues of consumer behaviour is contained in Richard Blundell’s article “Consumer Behaviour: Theory and Empirical Evidence – A Survey” in The Economic Journal, 98 (March 1988): 16–65.
- 3.
OECD is the Organization for Economic Co-operation and Development
- 4.
These are the results of analysis undertaken by the authors of Australian household expenditure. The adjusted regression coefficient was 0.547. The way in which durable goods and business-expense allowances were handled in the survey made consistency difficult to achieve.
References
Allen, R. G. D. (1967). Macro-economic theory – A mathematical treatment. London: Macmillan.
Arsham, H. (2004). Quadratic equations and its calculus. http://home.ubalt.edu/ntsbarsh/Business-stat/otherapplets/QUADREG.HTM downloaded 13 Jan 2005.
Attanasio, O. P. (2000). Cohort analysis of saving behavior by U. S. households. The Journal of Human Resources, XXXIII(3), 575–609.
Attanasio, O. P., Banks, J., Meghir, C., & Weber, G. (1999, January). Humps and bumps in lifetime consumption. Journal of Business & Economic Statistics, 17(1), 22–35.
Attanasio, O. P., & Hoynes, H. W. (2000). Differential mortality and wealth accumulation. The Journal of Human Resources, XXXV(1), 1–29.
Australian Bureau of Statistics (ABS). (undated). Household expenditure survey 1993–94. CURF File No. 408.
Australian Bureau of Statistics (ABS). (2000). Household expenditure survey 1998–99, summary of results. Canberra.
Australian Bureau of Statistics (ABS). (2006). 2003–03 (Reissue) household expenditure survey – summary of results. Catalogue No. 6530.0. Canberra.
Banks, J., Blundell, R., & Stanner, S. (1998, September). Is there a retirement-saving puzzle? The American Economic Review, 88(4), 769–788.
Blundell, R. (1988, March). Consumer behaviour: Theory and empirical evidence – a survey. The Economic Journal, 98, 16–65.
Bureau of Labor Statistics (BOLS). (2004). Consumer expenditures in 2002. Washington, DC: US Department of Labor.
Bureau of Labor Statistics (BOLS). (2008). Consumer expenditures in 2006. Washington, DC: US Department of Labor.
Bureau of Labor Statistics (BOLS). (2009). Consumer expenditures in 2007. Washington, DC: US Department of Labor.
Department of Statistics, Malaysia (DOSM). (2000). Report on household expenditure survey, Malaysia 1998/99. Kuala Lumpur.
Fernandez-Villaverde, J., & Krueger, D. (2004). Consumption over the life cycle: Facts from consumer expenditure survey data. September 14, 2004. Mimeo.
Friedman, M. (1957). A theory of the consumption function. Princeton, NJ: Princeton University Press.
Halvorsen, E. (2003). A cohort analysis of household saving in Norway. Discussion Paper No. 354. Oslo: Statistics Norway.
Hamermesh, D. S. (1984, February). Consumption during retirement: The missing link in the life cycle. The Review of Economics and Statistics, 66(1), 1–7.
Hobbs, F., & Stoops, N. (2002). Demographic trends in the 20th century. Census 2000 Special Report Series CEN SR-4. Washington, DC: U. S. Census Bureau.
Instituto Brasileiro de Geografia e Estatistica (IBGE). (2004). Pesquisa de Orçamentos Familiares 2002–2003 – Primeiros resultados. Rio de Janeiro: Ministerio de Planejamento, Orçamento e Gestão.
Instituto Nacional de Estadisticas (INE). (undated). Quinta Encuesta de Presuestos Familiares 1996/97. Santiago.
Keynes, J. M. (1967). The general theory of employment, interest and money. London: MacMillan.
Magnus, G. (2009). The age of ageing. How demographics are changing the global economy and the world. Singapore: Wiley (Asia).
Miniaci, R., Monfardini, C., & Weber, G. (2003). Is there a retirement consumption puzzle in Italy? Mimeo.
Modigliani, F. (1986, June). Life cycle, individual thrift, and the wealth of nations. The American Economic Review, 76(3), 297–313.
Modigliani, F., & Brumberg, R. (1954). Utility analysis and the consumption function: An interpretation of cross-section data. In K. K. Kurihara (Ed.), Post Keynesian economics (pp. 390–397). New Brunswick, NJ: Rutgers University Press.
Office of National Statistics (ONS). (2008). Family spending: A report on the 2007 and food survey. New York: Palgrave Macmillan.
Shorrocks, A. F. (1975, May). The age-wealth relationship: A cross-section and cohort analysis. The Review of Economics and Statistics, 57(2), 155–163.
Statistics Bureau of Japan (SBJ). (2006). Family income and expenditure survey – 2005 yearly average. Tokyo: Ministry of Internal Affairs and Communications. http://www.stst.go.jp?english/data/sousetai. Retrieved 19 June 2008.
Statistics New Zealand (SNZ). (2004). Household economic survey year ended 30 June 2004. Wellington. http://www.stats.gov.nz. Retrieved 10 July 2009.
Wilkes, R. E. (1995, June). Household life-cycle stages, transitions, and product expenditures. Journal of Consumer Research, 22, 27–42.
World Bank (WB). (2008). Global purchasing power parities and real expenditures – 2005 International Comparison Program. Washington, DC: World Bank.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2011 Springer Science+Business Media B.V.
About this chapter
Cite this chapter
Martins, J.M., Yusuf, F., Swanson, D.A. (2011). Life Cycle: Consumption, Consumer Income and Savings. In: Consumer Demographics and Behaviour. The Springer Series on Demographic Methods and Population Analysis, vol 30. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-1855-5_6
Download citation
DOI: https://doi.org/10.1007/978-94-007-1855-5_6
Published:
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-007-1854-8
Online ISBN: 978-94-007-1855-5
eBook Packages: Humanities, Social Sciences and LawSocial Sciences (R0)