IDEAS home Printed from https://ideas.repec.org/a/auv/jipbud/v30y2025i1p129-157.html

Life cycle effects on consumption share of income regimes: a Markov switching approach (in Persian)

Author

Listed:
  • Ansarinasab, moslem

    (Department of Economics, Faculty of Administrative Sciences and Economics, Vali-e-Asr University, Rafsanjan)

  • bidmal, najmeh

    (International economics, Department of Economics, Faculty of Management and Economics, Shahid Bahonar University of Kerman)

Abstract

Two key concepts in microeconomic theory and economic development are consumption and income. On the other hand, the age structure of the population is an important and effective factor in the formation of national savings and consumption. In this regard, this research examines the dynamics of the effect of population structure on life cycle consumption (testing Modigliani's hypothesis). In order to investigate the effect of the share of young and old people on the average desire to consume in Iran in the period from 1960 to 2021, the Markov switching model has been used. The results of this model are as follows: per capita income in both regimes had a negative effect on consumption share of income (APC). In the regime, a positive and significant relationship between the variable of population growth and the consumption share of income has been observed, but this relationship is estimated to be negative and insignificant in the regime. The age share variable (below 14 years) has a negative and insignificant effect on the consumption share of income in both regimes. The age share variable (over 64 years old) has had a negative and insignificant effect in the regime of one (high consumption) and a positive and significant effect in the regime of two (low consumption) on the consumption share of income. The results of this study clearly show that the share of non-working age has a positive effect on the consumption share of income. Therefore, considering the positive effect of income and population growth in increasing consumption, it is recommended that the country's macroeconomic policy makers pay special attention to these two variables in the country's macro planning. Also, since the results showed that the age share variable (below 14 years) did not have a significant effect on consumption, but the age share (above 64 years) had a negative and significant effect on consumption in Iran.

Suggested Citation

  • Ansarinasab, moslem & bidmal, najmeh, 2025. "Life cycle effects on consumption share of income regimes: a Markov switching approach (in Persian)," The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی Ùˆ بودجه), Institute for Management and Planning studies, vol. 30(1), pages 129-157, May.
    • Handle: RePEc:auv:jipbud:v:30:y:2025:i:1:p:129-157
    as

    Download full text from publisher

    File URL: http://eprj.ir/article-1-2226-en.pdf
    Download Restriction: no
    File URL: http://eprj.ir/article-1-2226-en.html
    Download Restriction: no
    File URL: http://eprj.ir/article-1-2226-fa.html
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    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:auv:jipbud:v:30:y:2025:i:1:p:129-157. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Nahid Jebeli The email address of this maintainer does not seem to be valid anymore. Please ask Nahid Jebeli to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/irpdair.html .

    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.