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Lifecycle consumption and household structure: A pseudo-panel approach

Gemma Abio, Concepció Patxot (), Alexandrina Stoyanova (), Raquel Andrés () and Guadalupe Souto ()
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Alexandrina Stoyanova: Universitat de Barcelona and BEAT
Raquel Andrés: Universitat de Barcelona
Guadalupe Souto: Universitat Autonoma de Barcelona

No 2022/436, UB Economics Working Papers from Universitat de Barcelona, Facultat d'Economia i Empresa, UB School of Economics

Abstract: This paper aims to identify empirically how household structure and other socioeconomic characteristics affect the lifecycle consumption profile, exploiting data available for Spain for the last 15 years. Given the nature of the data, we build a pseudo-panel of cross-sections. After reviewing the previous literature, adjusting cohort averages to timeinvariant and time-variant household characteristics, we propose employing the multilevel modelling approach WBRE (Within-Between Random Effects model). Results confirm the relevance of income as a predictor of household consumption while unveiling some interesting insights. Woman-headed households have a higher consumption profile than their man-headed counterparts after controlling for income. We observe a negative effect for number of toddlers when this characteristic is considered as a lifecycle predictor, while its impact is positive when comparisons are made between cohorts. Changing status from renter to owner has a positive within effect (lifecycle predictor), while the effect of owning on consumption is negative when contextual comparisons are made.

Keywords: Consumption; lifecycle; age; socioeconomic status. (search for similar items in EconPapers)
JEL-codes: C20 C21 C23 D12 E21 J11 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2022
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