Journals of Gerontology Series B: Psychological Sciences and Social Sciences, Vol 50, Issue 5 S274-S290, Copyright © 1995 by The Gerontological Society of America
Change in expenditure patterns of retirees: 1972-1973 and 1986-1987
M Nieswiadomy and RM Rubin
Department of Economics, University of North Texas, USA.
This study presents a comparative analysis of changes over time in
expenditure patterns of retirees. Tobit regressions reveal significant
differences in expenditure patterns in health care, leisure, necessities,
and philanthropy. Over the past two decades, health care became more of a
necessity, and its budget share increased. The marginal propensity to
consume (MPC) leisure activities more than doubled. Retirees allocated
lesser budget shares to the necessity areas of food and apparel, but single
females had increased housing shares. The budget share and MPC for
charitable contributions declined. Over time, the average propensity to
consume (APC) increased greatly from 94 to 103 percent, a potential problem
if elderly persons dissave at unsustainable rates. The spending of older
retirees now differs substantially from younger retirees, with the APC
declining with age, an apparent contradiction of the life cycle hypothesis.
Apparently, the retired are more cautious about spending in the latter
stages of the life cycle.