Consumption smoothing in Mexico over the life-cycle and the business cycle

Barbosa Rangel, Erika (2017) Consumption smoothing in Mexico over the life-cycle and the business cycle. PhD thesis, University of Nottingham.

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Abstract

This thesis examines household consumption behaviour over the life-cycle and the business cycle, using three rich Mexican datasets and several microeconometric techniques. The three chapters study how consumption is affected by: i) retirement; ii) intergenerational transfers; and iii) aggregate dynamics.

Chapter I investigates the empirical patterns in consumption around retirement using oportunidades dataset, in particular the existence of a ‘retirement-consumption puzzle’ among older households in Mexico. A detailed analysis of consumption dynamics and patterns in home production allows the chapter to conclude that there is no retirement consumption puzzle, which is consistent with augmented versions of the life-cycle model.

In light of these findings, Chapter II estimates the effect of adult child transfers on the household consumption of their elderly parents using the Mexican Health Aging Study (MHAS). The estimates indicate that parents have a positive marginal propensity to consume out of transfers. The results also suggest that parents’ increases in expenditure correlate with permanent transfers rather than temporary transfers.

Adding to this line of consumption research, Chapter III exploits the Mexican National Survey of Income and Expenditure (ENIGH) and investigates household consumption growth over the business cycle across income and consumption distributions. Aggregate fluctuations appear to affect household consumption uniformly across the majority of consumption distribution in Mexico. Nevertheless, the evidence also indicates that, compared to the highest income cohort, groups at the very bottom of the consumption and income distributions are more exposed to aggregate dynamics.

Item Type: Thesis (University of Nottingham only) (PhD)
Supervisors: Gathergood, John
Owens, Trudy
Keywords: Consumer behaviour, Home economics, Adult children, Family relationships, Retirees, Finance, Personal, Mexico
Subjects: H Social sciences > HF Commerce
Faculties/Schools: UK Campuses > Faculty of Social Sciences, Law and Education > School of Economics
Item ID: 43472
Depositing User: Barbosa-Rangel, Erika
Date Deposited: 19 Jul 2017 04:40
Last Modified: 13 Oct 2017 00:10
URI: http://eprints.nottingham.ac.uk/id/eprint/43472

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