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Centre for Policy on Ageing | |
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The effect of health on consumption decisions in later life
— evidence from the UK | | Author(s) | Eleni Karagiannaki |
| Corporate Author | ESRC Centre for Analysis of Social Exclusion - CASE, Suntory-Toyota International Centres for Economics and Related Disciplines - STICERD, London School of Economics and Political Science |
| Publisher | STICERD, London, 2009 |
| Pages | 41 pp (CASEpaper 136) |
| Source | Centre for Analysis of Social Exclusion, London School of Economics, Houghton Street, London WC2A 2AE. http://sticerd.lse.ac.uk/case |
| Keywords | Health [elderly] ; Expenditure [elderly] ; Savings ; Economic status [elderly] ; Social surveys. |
| Annotation | The analysis in this paper focuses on the impact of health on older people's savings and consumption decisions. In principle, there are at least five alternative channels through which health may affect consumption and savings. Ill health or deteriorating health may either induce a decrease or increase in consumption, while an increase in precautionary savings in anticipation of increased consumption needs can follow a a negative health shock. This paper's main objective is to describe how older people's consumption decisions adjust to health changes, and to disentangle the different channels through which consumption responds to health changes. To identify these factors, data from the British Household Panel Survey (BHPS) and the English Longitudinal Survey of Ageing (ELSA) are used to estimate a series of regression models which relate health changes to observe consumption changes. The findings suggest that there are significant adjustments in the composition of consumption following an illness onset. These adjustments reflect mainly the combined effect of increased costs associated with illness onset as well as the effect of constraints on opportunity to spend associated with illness onset. (RH). |
| Accession Number | CPA-090505001 B |
| Classmark | CC: J3: JDD: F:W: 3F |
Data © Centre for Policy on Ageing |
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| ...from the Ageinfo database published by Centre for Policy on Ageing. |
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