Life‐cycle Changes in Consumption Behavior: Age‐specific and Regional Variations*

Abstract

While research conducted over the last two decades has pointed to the important role played by household consumption in regional economic models, little attention has been directed to the consumption impacts associated not only with income changes, but also life-cycle changes. Using Japanese data, this paper explores some of the implications of life-cycle changes on consumption behavior using a modified AIDS (Almost Ideal Demand System) estimation system. Testing is directed to differences in age-specific consumption behavior and the potential differences in consumption by age and province.

Quality of Life and the Migration of the College‐Educated: A Life‐Course Approach

“…Second, postindustrial households occupy more life‐course stages than their industrial predecessors and their longitudinal consumption patterns now change a lot as they pass through life's recognizable stages. Indeed, Wakabayashi and Hewings (2007) provide recent evidence of this from Japan, where they suggest that such changes in consumption behavior have important implications for structural change in postindustrial economies. Moreover, their data indicate that significant regional variation exists in the budget shares of households, a finding that confirms that entire regions can have very different aggregate consumption profiles.…”

The Impact of Remittances on Regional Consumption and Investment

“…Another paper that investigates regional economic development through consumer theory is Wakabayashi and Hewings (). The focus of the paper is the impact of aging on consumption patterns of Japanese households.…”

“…Although Wakabayashi and Hewings () is not directly related to the research on remittances, it provides several observations that are relevant. Following this analysis, one can reach the conclusion that a transitory income‐shock, such as the receipt of remittances, may alter the regional expenditure preferences of households (particularly rural households with lower income levels).…”

“…At the same time, a portion of the income of households in a region is received from outside the region, while some of the consumption taking place in the region may be originated by nonresidents. Wakabayashi and Hewings () also emphasize the importance of adopting a framework as in Rose and Stevens () in regional and interregional analysis models (particularly for education expenditures). Following this line of thinking, as remittances alter income levels, many rural households may choose to send their children to better schools in urban centers, which then changes where education expenditures take place, and thus the level of the human capital that is developed.…”

Population aging: What role for regional science?

“…But how can productivity be increased over time and can it be increased given an aging population? In the latter case, savings and expenditures could change as populations age (Wakabayashi and Hewings 2007). Given that many baby boomers are heading into retirement carrying a larger debt load than previous generations, with higher debt loads encouraged by low interest rates and a culture of spending, what are the implications for consumer spending and saving, and how will this translate into economic growth and opportunities?…”