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Durable purchases over the later life cycle

Author

Listed:
  • Martin Browning

    (Institute for Fiscal Studies and University of Oxford)

  • Thomas Crossley

    (Institute for Fiscal Studies and University of Essex and European University Institute)

  • Melanie Lührmann

    (Institute for Fiscal Studies and Royal Holloway, University of London)

Abstract

We investigate life cycle patterns of demand for services from household durables using UK panel data. We take careful account of prices, demographics, labour supply and health. Demand for consumer electronics rises with age, while the demand for household appliances is fl?at. These ?findings contrast with the well documented decline in nondurable consumption at older ages, and suggest that studies that estimate the overall discount rate from nondurable consumption may underestimate consumer patience and the savings required to fund retirement. We also ?find important nonseparabilities between the demand for durables, labour supply and health status.

Suggested Citation

  • Martin Browning & Thomas Crossley & Melanie Lührmann, 2012. "Durable purchases over the later life cycle," IFS Working Papers W12/13, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:ifsewp:12/13
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    Cited by:

    1. Cavallari, Lilia & Romano, Simone & Naticchioni, Paolo, 2021. "The original sin: Firms’ dynamics and the life-cycle consequences of economic conditions at birth," European Economic Review, Elsevier, vol. 138(C).
    2. Damar, H. Evren & Lange, Ian & McKennie, Caitlin & Moro, Mirko, 2020. "Banking deregulation and household consumption of durables," IWH Discussion Papers 18/2020, Halle Institute for Economic Research (IWH).
    3. Zoë Fannon & B. Nielsen, 2018. "Age-period cohort models," Economics Papers 2018-W04, Economics Group, Nuffield College, University of Oxford.
    4. Sule Alan & Thomas Crossley & Hamish Low, 2012. "Saving on a Rainy Day, Borrowing for a Rainy Day," Koç University-TUSIAD Economic Research Forum Working Papers 1212, Koc University-TUSIAD Economic Research Forum.
    5. Wouter Nientker & Rob Alessie, 2019. "Female Labor Market Participation Across Cohorts: Evidence from the Netherlands," De Economist, Springer, vol. 167(4), pages 407-433, December.
    6. Edouard Augustin Ribes, 2021. "How does education influence individuals' use of bequests as a long-term care insurance?," Working Papers hal-03498481, HAL.
    7. Damar, H. Evren & Lange, Ian & McKennie, Caitlin & Moro, Mirko, 2022. "Banking deregulation and consumption of home durables," IWH Discussion Papers 4/2022, Halle Institute for Economic Research (IWH).
    8. Brown, Sarah & Harris, Mark N. & Spencer, Christopher & Taylor, Karl, 2020. "Financial Expectations and Household Consumption: Does Middle Inflation Matter?," IZA Discussion Papers 13023, Institute of Labor Economics (IZA).
    9. Alessandro Bucciol & Raffaele Miniaci, 2012. "Financial Risk Aversion, Economic Crises and Past Risk Perception," Working Papers 28/2012, University of Verona, Department of Economics.
    10. Cristina Bernini & Maria Francesca Cracolici & Peter Nijkamp, 2020. "Micro and Macro Resilience Measures of an Economic Crisis," Networks and Spatial Economics, Springer, vol. 20(1), pages 47-71, March.

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    More about this item

    Keywords

    life cycle model; consumer behaviour; durables;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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