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Necessity Rich, Leisure Poor: The Long-Term Relationship Between Income Cohorts and Consumption Through Age-Period-Cohort Analysis

Julkaisun tekijätKaronen Esa, Niemelä Mikko

KustantajaINVEST Flagship, University of Turku


Sarjan nimiINVEST Working Papers

Numero sarjassa8



Rinnakkaistallenteen osoitehttps://research.utu.fi/converis/portal/detail/Publication/49556363


The main aim of this study is to analyse household consumption patterns
in the highest and lowest income quintiles and explore how they have
changed over time and generations. Thus, the article explores whether
social inclusivity through consumption has truly increased. This study
utilises the cross-sectional time-series data of the Finnish Household
Expenditure Surveys (HESs), covering the period 1966–2016. We use the
Age-Period-Cohort Gap/Oaxaca (APCGO) model with logitrank dependent
variables as the main statistical method. Our results indicate that an
overall high income is advantageous with respect to income and spending,
though the gap between high- and low-income groups has remained
stagnant over cohorts. A more in-depth analysis reveals that the
expenditure gap, in terms of necessities, food, and groceries
consumption, has narrowed. Instead, income elastic-oriented spending on
culture and leisure time has significantly increased in the high-income
group, where the expenditure gap has expanded 60 percentage points over
the cohorts. Simply put, expenditures on necessities have become more
inclusive, but low-income groups are increasingly more ‘leisure-poor’.
Overall, high-income classes are spending an increasing amount of money
on culture and leisure time over cohorts.

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Last updated on 2022-07-04 at 18:41