IDEAS home Printed from https://ideas.repec.org/p/upf/upfgen/354.html
   My bibliography  Save this paper

Lyfe-cycle effects on household expenditures: A latent-variable approach

Author

Abstract

Using data from the Spanish household budget survey, we investigate life- cycle effects on several product expenditures. A latent-variable model approach is adopted to evaluate the impact of income on expenditures, controlling for the number of members in the family. Two latent factors underlying repeated measures of monetary and non-monetary income are used as explanatory variables in the expenditure regression equations, thus avoiding possible bias associated to the measurement error in income. The proposed methodology also takes care of the case in which product expenditures exhibit a pattern of infrequent purchases. Multiple-group analysis is used to assess the variation of key parameters of the model across various household life-cycle typologies. The analysis discloses significant life-cycle effects on the mean levels of expenditures; it also detects significant life-cycle effects on the way expenditures are affected by income and family size. Asymptotic robust methods are used to account for possible non-normality of the data.

Suggested Citation

  • Eva Ventura & Albert Satorra, 1998. "Lyfe-cycle effects on household expenditures: A latent-variable approach," Economics Working Papers 354, Department of Economics and Business, Universitat Pompeu Fabra.
  • Handle: RePEc:upf:upfgen:354
    as

    Download full text from publisher

    File URL: https://econ-papers.upf.edu/papers/354.pdf
    File Function: Whole Paper
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Biorn, Erik, 1992. "The Bias of Some Estimators for Panel Data Models with Measurement Errors," Empirical Economics, Springer, vol. 17(1), pages 51-66.
    2. Schaninger, Charles M & Danko, William D, 1993. "A Conceptual and Empirical Comparison of Alternative Household Life Cycle Models," Journal of Consumer Research, Oxford University Press, vol. 19(4), pages 580-594, March.
    3. Satorra, Albert & Neudecker, Heinz, 1994. "On the Asymptotic Optimality of Alternative Minimum-Distance Estimators in Linear Latent-Variable Models," Econometric Theory, Cambridge University Press, vol. 10(5), pages 867-883, December.
    4. Jørgen Aasness & Erik Biørn & Terje Skjerpen, 2003. "Distribution of preferences and measurement errors in a disaggregated expenditure system," Econometrics Journal, Royal Economic Society, vol. 6(2), pages 374-400, December.
    5. Punj, Girish N & Staelin, Richard, 1983. "A Model of Consumer Information Search Behavior for New Automobiles," Journal of Consumer Research, Oxford University Press, vol. 9(4), pages 366-380, March.
    6. Robert Summers, 1957. "A Note on Least Squares Bias in Household Expenditure Analysis," Cowles Foundation Discussion Papers 29, Cowles Foundation for Research in Economics, Yale University.
    7. Albert Satorra, 1991. "Asymptotic robust inferences in the analysis of mean and covariance structures," Economics Working Papers 3, Department of Economics and Business, Universitat Pompeu Fabra.
    8. Aasness, Jorgen & Biorn, Erik & Skjerpen, Terje, 1993. "Engel Functions, Panel Data, and Latent Variables," Econometrica, Econometric Society, vol. 61(6), pages 1395-1422, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gülay Günay & Ayfer Boylu & Özgün Bener, 2014. "An Examination of Factors Affecting Economic Status and Finances Satisfaction of Families: A Comparison of Metropolitan and Rural Areas," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 119(1), pages 211-245, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jørgen Aasness & Odd Erik Nygård, 2009. "Revenue functions and Dupuit curves for indirect taxes with cross-border shopping," Discussion Papers 573, Statistics Norway, Research Department.
    2. Terje Skjerpen, 2008. "Engel elasticities, pseudo-maximum likelihood estimation and bootstrapped standard errors. A case study," Discussion Papers 532, Statistics Norway, Research Department.
    3. Jørgen Aasness & Odd Nygård, 2014. "Revenue functions and Dupuit curves for indirect taxes with cross-border shopping," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(2), pages 272-297, April.
    4. Mujahid Mohiuddin Babu & Panuel Rozario Prince, 2011. "Factors Influencing the Overall Customer Satisfaction of the Wireless Internet Service Users: An Empirical Study in Bangladesh," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 2(6), pages 14-24, September.
    5. Holmoy, Erling & Vennemo, Haakon, 1995. "A general equilibrium assessment of a suggested reform in capital income taxation," Journal of Policy Modeling, Elsevier, vol. 17(6), pages 531-556, December.
    6. Coenders, Germà & Espinet, Josep Maria & Saez, Marc, 2001. "Predicting random level and seasonality of hotel prices. A structural equation growth curve approach," Working Papers of the Department of Economics, University of Girona 1, Department of Economics, University of Girona.
    7. Diana Ka-Yan Mok, 2005. "The Life Stages and Housing Decisions of Young Households: An Insider Perspective," Environment and Planning A, , vol. 37(12), pages 2121-2146, December.
    8. Singh, Sonika & Ratchford, Brian T. & Prasad, Ashutosh, 2014. "Offline and Online Search in Used Durables Markets," Journal of Retailing, Elsevier, vol. 90(3), pages 301-320.
    9. Jing Jian Xiao & Rui Yao, 2011. "Consumer Debt Delinquency over Life Cycle Stages," NFI Working Papers 2011-WP-18, Indiana State University, Scott College of Business, Networks Financial Institute.
    10. Matthias Pannhorst & Florian Dost, 2022. "A Life-Course View on Ageing Consumers: Old-Age Trajectories and Gender Differences," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 17(2), pages 1157-1180, April.
    11. Reinartz, Werner & Wiegand, Nico & Imschloss, Monika, 2019. "The impact of digital transformation on the retailing value chain," International Journal of Research in Marketing, Elsevier, vol. 36(3), pages 350-366.
    12. Prokhorov, Artem, 2012. "Second order bias of quasi-MLE for covariance structure models," Economics Letters, Elsevier, vol. 114(2), pages 195-197.
    13. Newton, Joshua D. & Tsarenko, Yelena & Ferraro, Carla & Sands, Sean, 2015. "Environmental concern and environmental purchase intentions: The mediating role of learning strategy," Journal of Business Research, Elsevier, vol. 68(9), pages 1974-1981.
    14. Jang, Sungha & Prasad, Ashutosh & Ratchford, Brian T., 2017. "Consumer Search of Multiple Information Sources and its Impact on Consumer Price Satisfaction," Journal of Interactive Marketing, Elsevier, vol. 40(C), pages 24-40.
    15. DeSarbo, Wayne S. & Choi, Jungwhan, 1998. "A latent structure double hurdle regression model for exploring heterogeneity in consumer search patterns," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 423-455, November.
    16. Goh, Khim-Yong & Chu, Junhong & Wu, Jing, 2015. "Mobile Advertising: An Empirical Study of Temporal and Spatial Differences in Search Behavior and Advertising Response," Journal of Interactive Marketing, Elsevier, vol. 30(C), pages 34-45.
    17. Hauser, John R., 2014. "Consideration-set heuristics," Journal of Business Research, Elsevier, vol. 67(8), pages 1688-1699.
    18. Heiman, Amir & McWilliams, Bruce & Zilberman, David, 2001. "Demonstrations and money-back guarantees: market mechanisms to reduce uncertainty," Journal of Business Research, Elsevier, vol. 54(1), pages 71-84, October.
    19. Lu, Qiang (Steven) & Yang, Yupin & Yuksel, Ulku, 2015. "The impact of a new online channel: An empirical study," Annals of Tourism Research, Elsevier, vol. 54(C), pages 136-155.
    20. Hauser, John R. & Urban, Glen L. & Weinberg, Bruce D., 1992. "Time flies when you're having fun : how consumers allocate their time when evaluating products," Working papers 3439-92., Massachusetts Institute of Technology (MIT), Sloan School of Management.

    More about this item

    Keywords

    Structural equations; multi-group analysis; life cycle effects; product expenditures;
    All these keywords.

    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:upf:upfgen:354. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: http://www.econ.upf.edu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.