Consumption over the Life Cycle: Some Facts from Consumer Expenditure Survey Data
AbstractThis paper uses a seminonparametric model and Consumer Expenditure Survey data to estimate life cycle profiles of consumption, controlling for demographics, cohort and time effects. In addition to documenting profiles for total and nondurable consumption, we devote special attention to the age expenditure pattern for consumer durables. We find hump-shaped paths over the life cycle for total, for nondurable and for durable expenditures. Changes in household size account for roughly half of these humps. The other half remains unaccounted for by the standard complete markets life cycle model. Our results imply that households do not smooth consumption over their lifetimes. This is especially true for services from consumer durables. Bootstrap simulations suggest that our empirical estimates are tight and sensitivity analysis indicates that the computed profiles are robust to a large number of different specifications.
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Bibliographic InfoPaper provided by David K. Levine in its series Levine's Working Paper Archive with number 506439000000000304.
Date of creation: 20 Feb 2003
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Other versions of this item:
- Jesus Fernandez-Villaverde & Dirk Krueger, 2002. "Consumption over the Life Cycle: Some Facts from Consumer Expenditure Survey Data," Centro de AltiÂsimos Estudios RiÂos PeÂ©rez(CAERP) 7, Centro de Altisimos Estudios Rios Perez (CAERP).
- Dirk Krueger & Jesus Fernandez-Villaverde, 2004. "Consumption over the Life Cycle: Some Facts from Consumer Expenditure Survey Data," 2004 Meeting Papers 173, Society for Economic Dynamics.
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
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