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Wealth Depletion and Life Cycle Consumption by the Elderly

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  • Michael D. Hurd

Abstract

The objective of the work reported in this paper is to find if the consumption data from the six waves of the Retirement History Survey are consistent with the life cycle hypothesis of consumption and to test the importance of a bequest motive for saving. The 12 data items which are used cover an estimated 36% of total consumption; the most important datum is food consumption. The findings support the life cycle hypothesis: as required, measured consumption among the elderly declines with age. A test of the bequest motive for saving based on the variation by extended family stricture in consumption paths provides no support for a bequest motive.

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  • Michael D. Hurd, 1990. "Wealth Depletion and Life Cycle Consumption by the Elderly," NBER Working Papers 3472, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3472
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    1. Michael D. Hurd & Susann Rohwedder, 2003. "The Retirement-Consumption Puzzle Anticipated and Actual Declines in Spending at Retirement," Working Papers DRU-3009, RAND Corporation.
    2. Xiaofen Lin, 1997. "Saving Before and After Retirement: A Study of Canadian Couples, 1969-1992," Independence and Economic Security of the Older Population Research Papers 13, McMaster University.
    3. Murray, Tim, 2019. "Defined benefit pensions and homeownership in the post-Great Recession era," MPRA Paper 92601, University Library of Munich, Germany.
    4. Michael D. Hurd, 1999. "Mortality Risk and Consumption by Couples," NBER Working Papers 7048, National Bureau of Economic Research, Inc.
    5. Tim Murray, 2018. "Do Potential Future Health Shocks Keep Older Americans from Using Their Housing Equity?," 2018 Papers pmu533, Job Market Papers.
    6. Ivo Bischoff & Nataliya Kusa, 2015. "Policy preferences for inheritance taxation," MAGKS Papers on Economics 201531, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    7. Steven J. Haider & Melvin Stephens, 2007. "Is There a Retirement-Consumption Puzzle? Evidence Using Subjective Retirement Expectations," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 247-264, May.
    8. Shu-Mei Chen & I-Chuan Yang, 2013. "Mobility, Housing Decisions and Economic Status of the Elderly in Taiwan," ERES eres2013_288, European Real Estate Society (ERES).
    9. Michael D. Hurd & Daniel McFadden & Angela Merrill, 2001. "Predictors of Mortality among the Elderly," NBER Chapters, in: Themes in the Economics of Aging, pages 171-198, National Bureau of Economic Research, Inc.
    10. Michael Hurd & Susann Rohwedder, 2003. "The Retirement-Consumption Puzzle: Anticipated and Actual Declines in Spending at Retirement," NBER Working Papers 9586, National Bureau of Economic Research, Inc.
    11. Robin Boadway & David Wildasin, 1994. "Taxation and savings: a survey," Fiscal Studies, Institute for Fiscal Studies, vol. 15(3), pages 19-63, August.
    12. Klepper, Gernot, 1995. "Sustainability and intergenerational transfers," Kiel Working Papers 683, Kiel Institute for the World Economy (IfW Kiel).
    13. Michael D. Hurd, 1993. "The Effects of Demographic Trends on Consumption, Saving and Government Expenditures in the U.S," NBER Working Papers 4601, National Bureau of Economic Research, Inc.
    14. Barry P. Bosworth & Ralph C. Bryant & Gary Burtless, 2004. "The Impact of Aging on Financial Markets and the Economy: A Survey," Working Papers, Center for Retirement Research at Boston College 2004-23, Center for Retirement Research.
    15. Michael Hurd & Daniel McFadden & Angela Merrill & Tiago Ribeiro, 2000. "Healthy, Wealthy, and Wise? Socioeconomic Status and Morbidity/Mortality," Econometric Society World Congress 2000 Contributed Papers 1887, Econometric Society.

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