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Health and Retirement Effects in a Collective Consumption Model of Older Households

Author

Listed:
  • Aline Bütikofer

    (University of Bern)

  • Arthur Lewbel

    (Boston College)

  • Shannon Seitz

    (Boston College)

Abstract

Using data on elderly individuals and couples, we estimate a collective model of household consumption of a variety of goods, showing how resources are shared between husband and wife, and how this allocation is affected by retirement and health status. We identify the extent to which shared consumption of some goods by elderly married couples reduces their costs of living relative to living alone. We also identify the fraction of household resources consumed by wives versus husbands, taking this jointness of some consumption into account. The results are relevant for household bargaining models and for a variety of welfare calculations.

Suggested Citation

  • Aline Bütikofer & Arthur Lewbel & Shannon Seitz, 2010. "Health and Retirement Effects in a Collective Consumption Model of Older Households," Boston College Working Papers in Economics 767, Boston College Department of Economics, revised 15 Jan 2011.
    • Handle: RePEc:boc:bocoec:767
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    References listed on IDEAS

    as
    1. Mariacristina De Nardi & Eric French & John Bailey Jones, 2005. "Differential mortality, uncertain medical expenses, and the saving of elderly singles," Working Paper Series WP-05-13, Federal Reserve Bank of Chicago.
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    Cited by:

    1. Cherchye, Laurens & De Rock, Bram & Vermeulen, Frederic, 2012. "Economic well-being and poverty among the elderly: An analysis based on a collective consumption model," European Economic Review, Elsevier, vol. 56(6), pages 985-1000.
    2. Eleftherios Giovanis & Oznur Ozdamar, 2018. "Empirical Application of Collective Household Labour Supply Model in Iraq," Working Papers 1180, Economic Research Forum, revised 19 Apr 2018.
    3. Daniel Burkhard, 2017. "Allocation of Expenditures in Elderly Households and the Cost of Widowhood," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 153(4), pages 371-401, October.
    4. Fabrizio Balli, 2012. "Are Traditional Equivalence Scales Still Useful? A Review and A Possible Answer," Department of Economics University of Siena 656, Department of Economics, University of Siena.
    5. Daniel Burkhard, 2015. "Allocation of Expenditures in Elderly Households and the Cost of Widowhood," Diskussionsschriften dp1503, Universitaet Bern, Departement Volkswirtschaft.
    6. Denni Tommasi & Alexander Wolf, 2016. "Overcoming Weak Identification in the Estimation of Household Resource Shares," Working Papers ECARES ECARES 2016-12, ULB -- Universite Libre de Bruxelles.
    7. Eleftherios Giovanis & Oznur Ozdamar, 2019. "A Collective Household Labour Supply Model with Disability: Evidence from Iraq," Journal of Family and Economic Issues, Springer, vol. 40(2), pages 209-225, June.

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    More about this item

    Keywords

    Collective household models; Bargaining models; Retirement; Aging; Health; Equivalence scales; Indifference scales; Cost of Living; Consumption; Welfare;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I1 - Health, Education, and Welfare - - Health
    • D6 - Microeconomics - - Welfare Economics
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

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