Marriage and consumption.
We examine theoretically and empirically consumption over the early part of the life-cycle. The main focus is on the transition from being single to living with someone else. Our theoretical model allows for publicness in consumption; uncertainty concerning marriage; differences between lifetime i...
| Main Authors: | , , |
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| Formato: | Working paper |
| Idioma: | English |
| Publicado em: |
Department of Economics (University of Oxford)
2009
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| Resumo: | We examine theoretically and empirically consumption over the early part of the life-cycle. The main focus is on the transition from being single to living with someone else. Our theoretical model allows for publicness in consumption; uncertainty concerning marriage; differences between lifetime incomes for prospective partners and a marriage premium. We develop a two period model to bring out the main features of the impact of marriage on consumption and saving. We then develop a multi-period model that can be taken to the data on expenditures by singles and couples aged between 18 and 30. Our empirical work is based on individual based quasi-panels from UK expenditure survey data from 1978 to 2005. The model fits the data relatively well. We find that expenditure by couples leads to 20 - 40% more consumption than the same expenditure split between two comparable singles. |
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