Arbeitspapier

Consumption and population age structure

In this paper the effects on aggregate consumption of changes in the age distribution of the population are analysed empirically. Economic theories predict that age influences individuals’ saving and consumption behaviour. Despite this, age structure effects are rarely controlled for in empirical consumption functions. Our findings suggest that they should. By analysing Norwegian quarterly time series data we find that changes in the age distribution of the population have significant and life cycle consistent effects on aggregate consumption. Furthermore, controlling for age structure effects stabilizes the other parameters of the consumption function and reveals significant real interest rate effects. Simulation experiments show that the numerical effect on the savings rate of age structure changes is substantial when the indirect effects via wealth and income are accounted for.

Language
Englisch

Bibliographic citation
Series: Memorandum ; No. 2004,27

Classification
Wirtschaft
Model Construction and Estimation
Forecasting Models; Simulation Methods
Macroeconomics: Consumption; Saving; Wealth
Demographic Economics: General
Subject
Consumption
demography
savings
time series models
cointegration
Gesamtwirtschaftlicher Konsum
Altersstruktur der Bevölkerung
Schätzung
Zeitreihenanalyse
Kointegration
Norwegen

Event
Geistige Schöpfung
(who)
Erlandsen, Solveig
Nymoen, Ragnar
Event
Veröffentlichung
(who)
University of Oslo, Department of Economics
(where)
Oslo
(when)
2004

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Erlandsen, Solveig
  • Nymoen, Ragnar
  • University of Oslo, Department of Economics

Time of origin

  • 2004

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