Spending Patterns in the Older Population
As people age from middle to old age, the composition of their spending changes. For example, they spend relatively more on health care services, donations, and gifts and relatively less on automobiles, trips, and vacations. Furthermore, the level of spending declines. These patterns of spending are of interest to economists because the patterns convey information about how people choose to allocate their resources over the life cycle and about how changing physical capacities with age alter the benefit from different types of spending. The patterns are also of interest to researchers of consumer behavior because they can be used to understand how the changing demographic structure of the population will cause changes in the demand for different types of goods and services. In this chapter, we present results on spending by the U.S. population aged 51 or older. We show how the composition and level of spending vary with age and with income and wealth.