Marriage and Consumption

Laura Blow, Martin Browning and Mette Ejrnæs
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Laura Blow: Institute for Fiscal Studies, London

No 2009-07, CAM Working Papers from University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics

Abstract: We examine theoretically and empirically consumption over the early part of the life-cycle. The main focus is on the transition from being single to living with someone else. Our theoretical model allows for publicness in consumption; uncertainty concerning marriage; differences between lifetime incomes for prospective partners and a marriage premium. We develop a two period model to bring out the main features of the impact of marriage on consumption and saving. We then develop a multi-period model that can be taken to the data on expenditures by singles and couples aged between 18 and 30. Our empirical work is based on individual based quasi-panels from UK expenditure survey data from 1978 to 2005. The model fits the data relatively well. We find that expenditure by couples leads to 20-40 % more consumption than the same expenditure split between two comparable singles.

Keywords: marriage; consumption; saving; family economics; economies of scale (search for similar items in EconPapers)
JEL-codes: D12 D91 J12 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2009-03
New Economics Papers: this item is included in nep-bec and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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