Lyfe-cycle effects on household expenditures: A latent-variable approach
AbstractUsing 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.
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Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 354.
Date of creation: Oct 1998
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Web page: http://www.econ.upf.edu/
Structural equations; multi-group analysis; life cycle effects; product expenditures;
Find related papers by JEL classification:
- M31 - Business Administration and Business Economics; Marketing; Accounting - - 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-03-08 (All new papers)
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