The Intergenerational Correlation of Consumption Expenditures
- (pp. 136-40)
Abstract
Using data recently collected by the Panel Study of Income Dynamics, we find that the intergenerational correlation in expenditures is no larger than that in income, suggesting limited intra-family risk-sharing. On the other hand, even after controlling for the intergenerational correlation in income, the expenditures correlation remains significant. This suggests that other factors such as preferences, access to credit, and non-pecuniary inter vivos transfers potentially played a role in consumption smoothing across generations within a family. We also find that the correlation coefficients estimated using food and imputed total expenditures are smaller than that estimated using the measured total expenditures.Citation
Charles, Kerwin Kofi, Sheldon Danziger, Geng Li, and Robert Schoeni. 2014. "The Intergenerational Correlation of Consumption Expenditures." American Economic Review, 104 (5): 136-40. DOI: 10.1257/aer.104.5.136Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- E21 Macroeconomics: Consumption; Saving; Wealth