Marriage and consumption

Martin Browning, Laura Blow and Mette Ejrnaes

No 427, Economics Series Working Papers from University of Oxford, Department of Economics

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)
Date: 2009
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Working Paper: Marriage and Consumption (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:oxf:wpaper:427

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