The Intergenerational Correlation of Consumption Expenditures

Kerwin Kofi Charles, Sheldon Danziger, Geng Li and Robert Schoeni

American Economic Review, 2014, vol. 104, issue 5, 136-40

Abstract: Using data recently collected by the Panel Study of Income Dynamics, we find that the intergenerational correlation in expenditures is no larger than that in income, suggesting limited intra-family risk-sharing. On the other hand, even after controlling for the intergenerational correlation in income, the expenditures correlation remains significant. This suggests that other factors such as preferences, access to credit, and non-pecuniary inter vivos transfers potentially played a role in consumption smoothing across generations within a family. We also find that the correlation coefficients estimated using food and imputed total expenditures are smaller than that estimated using the measured total expenditures.

JEL-codes: D12 E21 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/aer.104.5.136
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Citations: View citations in EconPapers (21)

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