Revisiting the Effect of Household Size on Consumption Over the Life-Cycle

Alexander Bick and Sekyu Choi

MPRA Paper from University Library of Munich, Germany

Abstract: Although the link between household size and consumption has a strong empirical support, there is no consistent way in which demographics are dealt with in standard life-cycle models. We study the relationship between the predictions of the Single Agent model (the standard in the literature) versus a simple model extension where deterministic changes in household size and composition affect optimal consumption decisions. We provide theoretical results comparing both approaches and quantify the differences in predictions across models.

Keywords: Consumption; Life-Cycle Models (search for similar items in EconPapers)
JEL-codes: D12 D91 E21 J10 (search for similar items in EconPapers)
Date: 2012-10
New Economics Papers: this item is included in nep-bec, nep-dem and nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Revisiting the effect of household size on consumption over the life-cycle (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:41756

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