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Retiree Consumerism - Essay Example

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Rose Rubin and Kenneth Koelin examine how elderly households spend on necessities, compared with non elderly households. Using data from 1980-81 and 1989- 90 consumers expenditure survey, they examine expenditures for housing, food at home, and health care, as well as income, demographics, and receipt of cash assistance (AFDC or SSI). The methodology used to examine the relationship between their variables of interest is based on the life cycle theory of consumption, with total expenditure acting as a proxy for permanent income. “Rubin and Koelin’s results indicate that, in general, older consumers spend a higher proportion of their budget on housing and health care than do the non elderly, and that the receipt of financial assistance does not play a role in the spending decisions of both age groups”(Rubin and Koelin) In a study of age groups within the older population, Mohammed Abdel-Chany and Deanna Sharpe uses Tobit analysis to determine whether tastes and preferences differ from those aged 65 to 74 and those aged 75 and older. Using independent variables such as total expenditure (once again as a surrogate for permanent income), region and residence, education of respondent, household size, race and family type, the authors find “differences between the “young-old” and “old-old” (as they term the groups) across all major categories of expense. Furthermore, the effect of the socio-economic variables on 2 spending patterns differed between the two age groups, and among spending categories”(Sharpe et al) ...Show more
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Summary

“The fastest growing segment of the U.S. population is composed of those aged 65 and older. The Bureau of the Census reported that in 1994, 1 in 8 Americans was in this age group, but projects that the ratio may be as high as 1 in 5 by 2050”(Census)…
Retiree Consumerism
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