MARC Record from Library of Congress

LEADER: 02661cam a22002897a 4500
001 2008610751
003 DLC
005 20080814092113.0
007 cr |||||||||||
008 080625s2008 mau sb 000 0 eng
010 $a 2008610751
040 $aDLC$cDLC
050 00 $aHB1
100 1 $aAguiar, Mark.
245 10 $aDeconstructing lifecycle expenditure$h[electronic resource] /$cMark Aguiar, Erik Hurst.
260 $aCambridge, MA :$bNational Bureau of Economic Research,$cc2008.
490 1 $aNBER working paper series ;$vworking paper 13893
538 $aSystem requirements: Adobe Acrobat Reader.
538 $aMode of access: World Wide Web.
500 $aTitle from PDF file as viewed on 6/25/2008.
530 $aAlso available in print.
504 $aIncludes bibliographical references.
520 3 $a"In this paper we revisit two well-known facts regarding lifecycle expenditures. The first is the familiar "hump" shaped lifecycle profile of nondurable expenditures. We document that the behavior of total nondurables masks surprising heterogeneity in the lifecycle profile of individual sub-components. We find, for example, that while food expenditures decline after middle age, expenditures on entertainment continue to increase throughout the lifecycle. These patterns pose a challenge to models that emphasize inter-temporal substitution or movements in income, including standard models of precautionary savings, myopia, and limited commitment, to explain the lifecycle profile of expenditures. Second, we document that the increase in the cross-sectional dispersion of expenditure over the lifecycle is not greater for luxuries. In particular, the dispersion in entertainment expenditure declines relative to food expenditures as households become older, casting further doubt on theories that emphasize (exclusively) shocks to permanent income to explain the rising cross sectional expenditure dispersion over the lifecycle. We propose and test a Beckerian model that emphasizes intra-temporal substitution between time and expenditures as the opportunity cost of time varies over the lifecycle. We find this alternative model successfully explains the joint behavior of food and entertainment expenditures in the latter half of the lifecycle. The model, however, is less successful in explaining expenditure patterns early in the lifecycle"--National Bureau of Economic Research web site.
700 1 $aHurst, Erik.
710 2 $aNational Bureau of Economic Research.
830 0 $aWorking paper series (National Bureau of Economic Research : Online) ;$vworking paper no. 13893.
856 40 $uhttp://papers.nber.org/papers/w13893