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The Impact of Age Distribution on Household Consumption: Evidence from Saudi Arabia

Author

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  • Rami Ben HAJ-KACEM

    (University of Dammam, Saudi Arabia.)

Abstract

This paper aims to analyze the impact of age distribution on household consumption at the aggregate level. For that, statistical and econometric techniques are used, such as Unit root test, Co-integration and Granger Engels causality through Vector Error Correction Model, for testing an eventual short and long run causal relationships. This study is important since it helps to develop efficient national strategies for the short and the long run according to the evolution of the demographic profile and structure. Empirical validation for the Saudi Arabian case shows that the causality’s effect differs significantly according to consider the size versus the proportion of each age group. In addition, the analysis and discussions of results for each age categories gave specific conclusions for the overtime causality effect on Saudi Arabian household final consumption.

Suggested Citation

  • Rami Ben HAJ-KACEM, 2015. "The Impact of Age Distribution on Household Consumption: Evidence from Saudi Arabia," Turkish Economic Review, KSP Journals, vol. 2(4), pages 277-304, December.
    • Handle: RePEc:ksp:journ2:v:2:y:2015:i:4:p:277-304
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    References listed on IDEAS

    as
    1. Fair, Ray C & Dominguez, Kathryn M, 1991. "Effects of the Changing U.S. Age Distribution on Macroeconomic Equations," American Economic Review, American Economic Association, vol. 81(5), pages 1276-1294, December.
    2. Mehdi Hajamini & Mohammad Ali Falahi, 2014. "The nonlinear impact of government consumption expenditure on economic growth: Evidence from low and low-middle income countries," Cogent Economics & Finance, Taylor & Francis Journals, vol. 2(1), pages 1-15, December.
    3. Jonathan A. Parker, 2000. "Spendthrift in America? On Two Decades of Decline in the US Saving Rate," NBER Chapters, in: NBER Macroeconomics Annual 1999, Volume 14, pages 317-387, National Bureau of Economic Research, Inc.
    4. Charles Yuji Horioka, 2000. "A Cointegration Analysis of the Impact of the Age Structure of the Population on the Household Saving Rate in Japan," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 511-516, August.
    5. Clifford L.F. Attfield & Edmund Cannon, 2003. "The Impact of Age Distribution Variables on the Long Run Consumption Function," Bristol Economics Discussion Papers 03/546, School of Economics, University of Bristol, UK.
    6. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Age distribution; Consumption; Causality; Cointegration; Statistical tests.;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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