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Consumer Expenditures and Home Production at Retirement: New Evidence from Germany

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  • Lührmann, Melanie

    (Sonderforschungsbereich 504)

Abstract

This paper investigates consumer expenditures of German households pre- and post-retirement. The widely observed distinct drop in spending upon retirement entry poses an empirical puzzle since life cycle theory predicts smoothing of the marginal utility of consumption over time. As one explanation, I explore the role of home production as a substitute for consumer expenses. Taking a combined look at consumer expenditures and time use pre and post-retirement, I find a significant drop of about 17% of pre-retirement expenses at retirement which coincides with an increase in time spent on home production of an additional 33% per day.

Suggested Citation

  • Lührmann, Melanie, 2007. "Consumer Expenditures and Home Production at Retirement: New Evidence from Germany," Sonderforschungsbereich 504 Publications 07-13, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  • Handle: RePEc:xrs:sfbmaa:07-13
    Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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    More about this item

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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