Age, Retirement, and Expenditure Patterns: An Econometric Study of Older Households
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abstract
The paper explores the allocation of consumption expenditure by the
older population among different categories of goods and services,
and how expenditure patterns change with age within that
population. Of particular interest is whether observed differences
between pre-retirement and post-retirement patterns are a
consequence of changes in "tastes" or reductions in income. An
adapted form of the Deaton and Muellbauer Almost Ideal Demand
System is estimated with data from six Family Expenditure Surveys
and used to investigate that question. The findings suggest that
observed changes in budget allocations are most closely related to
reductions in income.
