A Comparison of Micro and Macro Expenditure Measures Across Countries Using Differing Survey Methods

Barrett, Garry F.; Levell, Peter; Milligan, Kevin

doi:10.3386/w19544

Cited by 25 publications

(32 citation statements)

References 9 publications

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“…The top left panel shows coverage rates for total spending (including medical) which decline faster in the UK than the US. 15 These fall from 80% to 71% in the UK over the Barrett et al (2015). The primary difference is that medical spending is not removed from total spending here but is removed in Barrett et al 16 These figures are obtained by taking the proportional change in coverage (i.e.…”

Section: Appendix A: the Within Period Demand Systemmentioning

confidence: 99%

Life-Cycle Consumption Patterns at Older Ages in the US and the UK: Can Medical Expenditures Explain the Difference?

Banks¹,

Blundell²,

Levell³

et al. 2016

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In this paper we document significantly steeper declines in nondurable expenditures in the UK compared to the US, in spite of income paths being similar. We explore several possible causes, including different employment paths, housing ownership and expenses, levels and paths of health status, number of household members, and out-of -pocket medical expenditures. Among all the potential explanations considered, we find that those to do with healthcare-differences in levels and age paths in medical expenses-can fully account for the steeper declines in nondurable consumption in the UK compared to the US. What can explain a difference of this magnitude? An obvious starting point is to examine age paths of income to access the extent to which consumption expenditures are tracking age paths in household income. But the second panel in Figure 1, which plots cohort averaged paths of household income at older ages in the two countries, demonstrates that, if anything, incomes decline at a slightly faster rate in the US than the UK. This therefore seems unlikely to be the major reason for a flatter spending profile in the US. In this paper we investigate other possible reasons that may explain the dramatically different patterns of nondurable consumption of older ages in the two countries by investigating differences in both inter and intra-temporal consumption for households around and beyond retirement age. The set of factors that we explore in this paper include: differential cohort effects in the two countries that may distort average life-cycle age profiles, differences in timing of retirement in the presence of separabilities with employment, differential paths of housing expenditures possibly driven by institutional differences in housing markets between countries, level and path differences in health status and mortality, and finally levels and volatility of medical spending in the US as deteriorating health with age leads to higher spending there while this is not true in the UK because of the National Health Service (NHS). Our empirical strategy is to first quantify cross-country differences in three potential factors-employment, housing status and health-and look for any immediate differences that might explain the differential consumption paths observed in Figure 1. We find,however, that most of these variables evolve in a similar way in both countries although there are some notable differences in tenure status. But even in the absence of differences in profiles, these three factors could play a role in explaining the different shape of spending profiles if there are differences in the nature of non-separabilities between these variables and consumption expenditures across the two countries. Hence, we move on to look for evidence of such non-separabilities by examining their effect on within-period budget allocations in a simple demand system estimated in each of the two countries. We find evidence that the relationship between health expenditures and mortality and employment is much stronger in the U...

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Section: Appendix A: the Within Period Demand Systemmentioning

confidence: 99%

Life-Cycle Consumption Patterns at Older Ages in the US and the UK: Can Medical Expenditures Explain the Difference?

Banks¹,

Blundell²,

Levell³

et al. 2016

Self Cite

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“…3 Barrett, Levell and Milligan (2013) compare the performance of household expenditure surveys across countries and conclude that growing inequality contributed to declining coverage rates. This suggests that, if anything, expenditure coverage may be lower for younger cohorts, who have tended to be more unequal than their predecessors (see Section 2.2).…”

Section: Levels Of Income Spending and Savingmentioning

confidence: 99%

The economic circumstances of cohorts born between the 1940s and the 1970s

Hood¹,

Joyce²

2013

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“…acknowledges support from the ESRC through the ESRC-funded Centre for Microeconomic Analysis of Public Policy at the Institute for Fiscal Studies (CPP, reference RES-544-28-5001). Barrett et al (2014) report that over a similar period, the Australian and Canadian budget surveys also experienced a fall in response rates but that those falls started later and were not accompanied by a decline in the coverage of national accounts consumption. 2 Readers are referred to Deaton (1992) for a discussion of some of the issues in constructing a measure of consumption.…”

Section: Acknowledgmentsmentioning

confidence: 96%

“…In some (but not all) countries, response rates are falling, and the correspondence between national budget survey data and national accounts data is deteriorating (Krueger et al 2010, Barrett et al 2014. For example, for the period 1986-2007, Barrett et al (2014) report that the response rate to the CE fell by 11 percentage points (to 74%) and to the FES by 17 percentage points (to 53%) and that the coverage of a national accounts-based measure of consumption fell by 13 percentage points for the CE (to 71%) and by 16 percentage points (to 67%) for the FES. Recent research on the CE has demonstrated that nonresponse in that survey is differential by income, with very high-income households being underrepresented.…”

Section: )?mentioning

confidence: 99%

The measurement of household consumption expenditures

Browning

Crossley

Winter

2014

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Abstract:Household-level data on consumer expenditures underpins a wide range of empirical research in modern economics, spanning micro-and macroeconomics. This research includes work on consumption and saving, on poverty and inequality, and on risk sharing and insurance. We review different ways in which such data can be collected or captured: traditional detailed budget surveys, less onerous survey procedures that might be included in more general surveys, and administrative or process data. We discuss the advantages and difficulties of each approach and suggest directions for future investigation.2

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A Comparison of Micro and Macro Expenditure Measures Across Countries Using Differing Survey Methods

Cited by 25 publications

References 9 publications

Life-Cycle Consumption Patterns at Older Ages in the US and the UK: Can Medical Expenditures Explain the Difference?

Life-Cycle Consumption Patterns at Older Ages in the US and the UK: Can Medical Expenditures Explain the Difference?

The economic circumstances of cohorts born between the 1940s and the 1970s

The measurement of household consumption expenditures

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