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Understanding the Retirement-Consumption Puzzle through the Lens of Food Consumption − Fuzzy Regression-Discontinuity Evidence from Urban China

Tinghe Deng, Qihui Chen and Junfei Bai

No 235535, 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts from Agricultural and Applied Economics Association

Abstract: This paper attempts to provide an understanding of the widely-documented retirement-consumption puzzle from the perspective of food consumption. Exploiting urban China's "forced" retirement system, we use the legal retirement age cut-off as an instrumental variable for one's retirement status to estimate the causal impacts of retirement on four major aspects of food consumption for males aged 50-70 in urban China: food expenditure, time spent on food acquisition, the quantity and quality of food consumed. Our fuzzy regression-discontinuity analysis of the China Health and Nutrition Survey data finds that, consistent with the retirement-consumption puzzle, retirement reduces individuals' total food expenditure by 49%. However, retirement barely changes their quantity of food consumed (measure by total calorie intakes). Serving to reconcile the differential retirement impacts on elderly males' food expenditure and consumption, retirees are found to substitute their time for money in food acquisition upon retirement. However, they have to sacrifice some quality for quantity of food consumption while smoothing the latter. Given the criteria provided by the Chinese Nutrition Association, retirement negatively affects retirees' diet balance. They consume significantly less food with animal origins (and thus less fat and protein) and more grains (and thus more carbohydrate) upon retirement.

Keywords: Food expenditure; Food consumption; Resource substitution; Retirement; Urban China; Consumer/Household Economics; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; E20; J14; J26 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-cna and nep-tra
Date: 2016-08-02
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