Economic well-being and poverty among the elderly: An analysis based on a collective consumption model

Laurens Cherchye, Bram De Rock and Frederic Vermeulen

European Economic Review, 2012, vol. 56, issue 6, 985-1000

Abstract: We apply the collective consumption model of Browning et al. (2010) to analyse economic well-being and poverty among the elderly. The model focuses on individual preferences, a consumption technology that captures the economies of scale of living in a couple, and a sharing rule that governs the intra-household allocation of resources. The model is applied to a time series of Dutch consumption expenditure surveys. Our empirical results indicate substantial economies of scale and a wife's share that is increasing in total expenditures. We further calculated two sets of poverty rates: one based on the collective consumption model and one based on the traditional approach with a standard equivalence scale. Poverty among widowers is underestimated by the traditional approach. The same is true for women (men) in elderly couples for the first (later) time periods in our analysis. Finally, we analysed the impact of becoming a widow(er). Based on cross-sectional evidence, we find that the drop in material well-being following the husband's death is rather substantial for women. For men, the picture is reversed.

Keywords: Collective model; Intra-household allocation; Indifference scales; Economies of scale; Poverty (search for similar items in EconPapers)
JEL-codes: D11 D12 D13 D63 I31 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

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Related works:
Working Paper: Economic well-being and poverty among the elderly: an analysis based on a collective consumption model (2012)
Working Paper: Economic well-being and poverty among the elderly: an analysis based on a collective consumption model (2008)
Working Paper: Economic well-being and poverty among the elderly: an analysis based on a collective consumption model (2008)
Working Paper: Economic Well-Being and Poverty among the Elderly: An Analysis Based on a Collective Consumption Model (2008)
Working Paper: Economic Well-Being and Poverty Among the Elderly: An Analysis Based on a Collective Consumption Model (2008)
Working Paper: Economic Well-Being and Poverty Among the Elderly: An Analysis Based on a Collective Consumption Model (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:56:y:2012:i:6:p:985-1000

DOI: 10.1016/j.euroecorev.2012.05.006

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