1. Comparing Consumption: inter-national and inter-temporal
An-Chi Tung,

2. Outline Graphs across economies Findings and questions
patterns: right peak, left peak, twin peak, central peak…
public vs private
health and education
Findings and questions
trend? changes? why? what impact? …

3. Graphs of Consumption

4. List of Countries

7. Patterns of Mean Consumption: preliminary guess
Peak at right end
US 2003, Sweden 2003
Twin Peaks
Japan 1999, Costa Rica 2004, France 2001, Korea, 2000
Peak at left
with immediate drop: Taiwan 1986, 1991, 1998, 2003
with smooth drop: Thailand 1996, 2004; Indonesia 1996, 1999
Other: Increasing, flat, decreasing…
Chile 1997, Uruguay 1994, India 1999, Philippines 1999?

8. - very high ratio for Sweden! (The US is high, too.)
- due to health expenditures? mostly public?

9. - due to both education and health?
Japan: …38…57
Costa Rica: 27…43…57
France: …43…54
Korea: …42…53
(Taiwan: [29]..58)
- due to both education and health?

10. - time pattern: save less over time?
Peak age: 19-21
- due to education?
- time pattern: save less over time?

11. mild peak, due to education?
Thailand 2004:
Thailand 1996:
Indonesia 1996, 1999 : 23
mild peak, due to education?
if so, the peak age is a little late in Indonesia (check why)
- time pattern

12. Chile: 50

13. Very late!
Late!
Education?

14. Why Different? (i) time: increasing over time?
Differences among age groups may have to do with
(i) time: increasing over time?
(ii) composition of consumption: education, health, others…
(iii) private or public
and financial sources: YL, asset reallocation, transfer…

15. Time Trend of Level and Shape

17. Taiwan,

18. From Gretchen Donehower : Labor Income and Consumption, 1888-2003
Dollars (US, 2000)
NOTES:
So you can see a few things over time:
Lots of smoothing in early profiles - sparse surveys
Changing shape of consumption - increasing at older ages
Changing shape of labor income - narrowing years of peak earnings.
How to compare across time when scale is changing? (Even after adjusting to constant dollars, economic growth has been pretty steady over the past 115 years.)
USUAL NTA TRICK OF SCALING TO (UNWEIGHTED) AVERAGE LABOR INCOME VALUE FOR AGES 30-49
Age

19. Composition of Consumption
Importance of Health and Education
Size of the Public Sector

20. Public vs. Private Public Private
education: allocated by no. of students at each level
health: NHI, by individual; non-NHI, per capita
the rest: per capita
Private
education: regression on students
health: regression
housing and durables: equivalence scale
the rest: equivalence scale

21. Decomposing Consumption (normalized by mean YL age 30-49)
Sweden US Japan Taiwan 2003
Indonesia Costa Rica Thailand Taiwan 1981

22. % of Health and Education in C (normalized by mean YL age 30-49)
Sweden Japan France Uruguay 1994
Taiwan Japan Philippines Indonesia 1999

23. % of Public C in C (normalized by mean YL age 30-49)
Sweden Japan France Uruguay 1994
Taiwan Japan Philippines Indonesia 1999

24. Change in Composition over Time in Taiwan
(normalized to avg C of age 20-64)
Taiwan, 1981
Taiwan, 2003
Larger share of public C, and larger shares of CGE and CGH for age than in 1981
Allocating more to the youth group than to the elderly
Age

25. Taiwan, 1981 Chile,1997 Taiwan, 2003 Sweden, 2003 Taiwan, 2003
Age
Age
Taiwan, 2003

26. Issues and Questions

27. General Observations
There are differences across economies in level, shape, composition. For example, some countries have much larger public sector than the others, and some spend more on education.
For total C, there are four basic types.
Longitudinally, there may be a time trend.

28. Some questions About trend or changes over time:
- Is avg C (relative to YL) rising over time? Has this to do with GDP level or co-residence pattern?
- Why does avg C drop after an early age: e.g. age 19 in Taiwan, 1998?
2. Does the increase in public consumption on health spending reduce the public consumption on education (as in the case of Taiwan)? If yes, future growth may be affected.
Does the increase in public consumption on health cause a decrease in private consumption on health? …

29. Methodological Issues…
Same definition of education and health across countries?
(e.g., does “education” includes boarding expenditure and private tutoring?
2. Which methodology is best?