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Lifecycle consumption and household structure: A pseudo-panel approach

Author

Listed:
  • Gemma Abio

    (Universitat de Barcelona and BEAT)

  • Ció Patxot

    (Universitat de Barcelona and BEAT)

  • Alexandrina Stoyanova

    (Universitat de Barcelona and BEAT)

  • Raquel Andrés

    (Universitat de Barcelona)

  • Guadalupe Souto

    (Universitat Autonoma de Barcelona)

Abstract

This paper aims to identify empirically how household structure and other socioeconomic characteristics affect the lifecycle consumption profile, exploiting data available for Spain for the last 15 years. Given the nature of the data, we build a pseudo-panel of cross-sections. After reviewing the previous literature, adjusting cohort averages to timeinvariant and time-variant household characteristics, we propose employing the multilevel modelling approach WBRE (Within-Between Random Effects model). Results confirm the relevance of income as a predictor of household consumption while unveiling some interesting insights. Woman-headed households have a higher consumption profile than their man-headed counterparts after controlling for income. We observe a negative effect for number of toddlers when this characteristic is considered as a lifecycle predictor, while its impact is positive when comparisons are made between cohorts. Changing status from renter to owner has a positive within effect (lifecycle predictor), while the effect of owning on consumption is negative when contextual comparisons are made.

Suggested Citation

  • Gemma Abio & Ció Patxot & Alexandrina Stoyanova & Raquel Andrés & Guadalupe Souto, 2022. "Lifecycle consumption and household structure: A pseudo-panel approach," UB School of Economics Working Papers 2022/436, University of Barcelona School of Economics.
    • Handle: RePEc:ewp:wpaper:436web
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    File URL: http://hdl.handle.net/2445/190618
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    References listed on IDEAS

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    More about this item

    Keywords

    Consumption; lifecycle; age; socioeconomic status.;
    All these keywords.

    JEL classification:

    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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