Consumption patterns and demand in households headed by the elderly: evidence from Brazil

Abstract

PurposeThe main objective of this paper is to analyze patterns of consumption expenditure and the effects of income, prices and socioeconomic and demographic factors on demand among elderly- and young-adult-headed households in Brazil.Design/methodology/approachThe authors estimated a Quadratic Almost Ideal Demand System demand system using the main household consumption good groups – food, housing, clothing, transportation, health care and other expenses – with data from three Brazilian Household Budget surveys.FindingsThe study results showed that elderly- and young-adult-headed households have different consumption patterns. The consumption of food, transportation and health care was more price-sensitive for households headed by the elderly, while higher income increases health care expenses in elderly-headed households to a greater extent than it does in younger-headed households.Research limitations/implicationsThe limitations are due to the structure of the data used, such as the effects of seasonality and individualized demand analyses, and sample design in the estimates. However, due to the structure of the demand models, which when estimating by seemingly unrelated regressions do not allow to take into account the sample design.Practical implicationsAs a consequence of population aging, the Brazilian economy will experience changes in the composition of household consumption, mainly for food, housing, transportation and health-care-related products.Originality/valueThis paper fulfills the lack of studies that analyze the consumption patterns and how demand varies across different types of elderly-headed households in a developing country, such as Brazil.