Key Findings Details
Consumption and Differential Mortality
Michael Hurd and Susann Rohwedder
- We find that those who are wealthier tend to live longer.
- Analysis of HRS data for 2000-2004 showed that among single persons, average wealth two years prior to death was 81 percent of that of survivors. The median wealth of single people who died was only 45 percent that of survivors.
- The mean wealth of couples where one member became deceased was 66 percent that of couples where both survived. The disparity in median wealth was 65 percent.
- While those who consume more tend to be wealthier and live longer, the dying spend a greater proportion of their wealth than do those who survive. This proportion of wealth spent is greater for singles than for married persons.
- We find that cross-sectional data on consumption does not accurately reflect life-cycle spending trajectories: the cross-sectional profiles decline much more slowly with age than the panel profiles. The results of cross-sectional profiles overestimate the needs of individuals and households for economic resources in retirement.
- Synthetic panels provide a fairly close approximation to true panels, which means that studies based on the CEX are likely to approximate studies based on panel data.