Paper #354

Títol:

Lyfe-cycle effects on household expenditures: A latent-variable approach

Autors:

Eva Ventura i Albert Satorra

Data:

Octubre 1998

Resum:

Using data from the Spanish household budget survey, we investigate life- cycle effects on several product expenditures. A latent-variable model approach is adopted to evaluate the impact of income on expenditures, controlling for the number of members in the family. Two latent factors underlying repeated measures of monetary and non-monetary income are used as explanatory variables in the expenditure regression equations, thus avoiding possible bias associated to the measurement error in income. The proposed methodology also takes care of the case in which product expenditures exhibit a pattern of infrequent purchases. Multiple-group analysis is used to assess the variation of key parameters of the model across various household life-cycle typologies. The analysis discloses significant life-cycle effects on the mean levels of expenditures; it also detects significant life-cycle effects on the way expenditures are affected by income and family size. Asymptotic robust methods are used to account for possible non-normality of the data.

Paraules clau:

Structural equations, multi-group analysis, life cycle effects, product expenditures

Codis JEL:

M31, C31, C51, D12

Àrea de Recerca:

Macroeconomia i Economia Internacional

Publicat a:

Qüestió, 25, 1, (2001), pp. 93-117

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